Banking by Post
The country’s vast postal network offers many new possibilities.
India’s Department of Posts, also known India Post, is a governmentoperated postal system. It is generally referred to as "the post office."
This post office network dates back to the late eighteenth century. Lord Clive established first a postal service in India in 1766 and it slowly developed when Warren Hastings established a General Post Office in Calcutta with a general postmaster in 1774. India was divided into presidencies at the time. GPOs in Madras and Bombay started operating in 1786 and 1793. At present, India has 1,55,015 post offices operational in the country, 89.76% of which are in the rural areas. Employing a decent share of 2.18 locals, the post office network in India has undergone growth that has expanded by seven times since independence in when there were merely 23,344 post offices in operation.
The strong Indian post office network is vital because of the parttime Extra Departmental Post Offices that employ locals of the area. These employees work for five hours a day and deliver mails on payment of a certain allowance. They must meet a pre-defined employment criterion as well. Four organizational post office structures operate in India – Head Post Offices, Sub Post Offices, Extra Departmental Sub Post Offices and Extra Departmental Branch Post Offices.
On an average, each post office serves a population of 7,175 and covers a service area of 21.21 square kilometers. Even though this is the world’s largest operating post office
Several other projects to improve the postal system and its processes and efficiencies have also been initiated.
system, it struggles to remain efficient in terms of core service delivery. The Post Office Savings Account has depicted an increase of 500% - the growth indicator being the number of deposits. A new emphasis on the banking system in this post office network can prove to be a feasible step towards stabilizing socio-economic development.
In this direction, India Post has now created a full-fledged postal bank - Post Bank of India (PBI) - which will leverage its massive network of 1,55,000 post offices. Some 90% of the post offices operate in the rural areas. At present, banking operations reach tier 1 and 2 cities that are most penetrated in terms of service reach. A fair share finds its way into tier 3 towns too, but tier 4 areas have remained deprived of banking altogether. 40% of India’s population does not get banking services. With some 23,000 bank branches that are likely to be established in 2015 through the Post Bank of India, hundreds of post office branches will serve as a parallel banking system.
Post Offices get deposits of 6 lakh crore each year which is second to the State Bank of India. On gaining enough momentum, ATM machines may be set up at 2800 different locations around the country. Post Bank of India can start three banking services instantly based on consumer banking, insurance and e-commerce. The finance ministry, however, considers the postal system not adequately equipped to handle commercial banking and that venturing into banking would require extra expertise, particularly in handling credit. The banking license granted by the Reserve Bank of India only allows deposit and payment services to PBI and restricts grant of loans.
It is also emphasized that in establishing one PBI branch in each district initially, a capital cost of 500 crores would be incurred and should be borne by the government. The Post Bank of India, once operational, shall also shoulder the financial loss of 6,346 Indian Rupees incurred by private couriers and email services during 2011-12. Meeting the gap is tricky right now because post office charges are highly subsidized in the rural areas – 66% on an average and up to 85% in more remote rural villages. The uniqueness of th present post office network offers latent room for socio-economic growth and development on a national scale. The PBI could be another potentially fruitful project.
Several other projects to improve the postal system and its processes and efficiencies have also been initiated. The Mail Network Optimization Project ( MNOP) seeks to enhance the competence of mailing and speed post. Project Arrow in 2008 overhauled operations like savings banks and remittances. It also focused on branding, technology and infrastructure of the Indian post office system. There is another initiation that works towards creating a national database management system of postal addresses. At the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), wages are disbursed through post across 19 postal networks in the rural sector of India.
A particular post office has become a tourist attraction in Sri Nagar. It is a floating post office on the Dal Lake having been built on a gigantic boat and is operational since 2011,. It has a philately museum and sells local postage stamps too. Letters posted through this post office have special postmarks depicting the scenic beauty of Jammu and Kashmir. Some 1700 more post offices are located in this district at present.
India is a member of two international postal organizations – the Universal Postal Union ( UPU) since 1876 and the Asian Pacific Postal Union (APPU) since 1964. It exchanges mail with more than 217 countries and the postal complex in India by air and land and is contributing to social, economic, banking and technological development. - S.F.