Dear Comrades,
Terming the proposal to set up Post Banks as a "game changer", industry body Assocham today said the transition will push financial inclusion in the country, besides raising rural savings and investment levels.
The Department of Posts (DoP) has applied for a banking licence. The Reserve Bank of India is expected to issue licences to shortlisted entities in January 2014.
"This is a huge resource at hand and touches almost every part of the country's interior. Just Rs 100 per household saved every month could bring over Rs 12,000 crore from 45% of unbanked households in rural areas," Assocham said.
The industry chamber suggested linking of Mahatma Gandhi National Rural Employment Guarantee (MGNREG) and other government payments in rural areas through the India Post Bank, besides handling five million self-help group units.
Moreover, it suggested establishing linkages between Post Bank and the proposed Women's Bank, with at least one woman employee in each post office bank branch; apart from utilising PSU banks' training facilities and bringing Post Bank under some PSU bank for operational oversight.
India Post has already been handling several financial schemes in villages like National Small Savings, Recurring Deposits, Public Provident Fund, Postal Insurance, etc.
In recent years, 4 crore MGNREG accounts have been handled through post offices for payment of wages, forming over 40% of the MGNREG funds for job entitlement scheme.
"India Post is handling an outstanding balance of Rs 6 lakh crore, providing it enormous potential for savings and investment at the grass root level," Assocham said.
The India postal network has 1,54,822 post offices in the country. Of these, 1,39,086 are in rural areas and 15,736 are in urban regions.
There are around 90,000 bank branches in the country and provision of real-time banking services through postal network is estimated to triple the current banking network.
The DoP has plans to start 50 bank branches in the first year and scale it to a total of 150 branches in five years.
Finance Minister P Chidambaram in this year's Budget proposals had said post offices would become part of the core banking solution (CBS) and offer real time banking services.
He had proposed a provision of Rs 532 crore for the project in 2013-14.
The Post Banks are proposed to be owned by DoP but with a completely independent board, governance structure and operations. It will have representation from Ministries of Finance and Communication & IT.
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