.The humble post office is all set to undergo a radical change with a proposal to convert over 1.5 lakh post offices across the nation into full fledged banks on the anvil.
Telecom Minister Kapil Sibal wants to reach out to the masses in the rural areas with modern banking facilities through the post offices.
"We want to commercialise the department. We will seek a licence from the RBI to convert all our post offices into banks," Sibal told PTI.
The lack of modern banking facilities in rural areas and dependence of villagers on informal sector for their credit requirements has prompted the government to work on financial inclusion by way of setting up 'postal banks'.
"The State Bank of India can't build branches all over India, but there are post offices across India. The branches are already there, so infrastructure expenditure is not required. So you can actually give banking facilities at relatively lower costs, which would be extremely beneficial to people," he said.
The post offices currently offer financial services like savings bank, postal life insurance, pension payments and money transfer services. Its total corpus stood at Rs 5,82,832.9 crore as on March 31, 2011.
DoP's revenues grew 11 per cent to Rs 6,954.09 crore in 2010-2011 from Rs 6,266.70 crore in the previous fiscal.
However, negative growth rate in some circles has pushed the Department's deficit to Rs 6,625 crore in FY'11, almost equal to the annual revenue of the Department.
"I want to make the (postal) system commercialised. By corporatising over 1.5 lakh post offices across the country, the ministry is expecting to improve the quality of services, increase profitability and reduce prices," Sibal said.
Out of the 22 DoP circles, some circles like Chhattisgarh have reported a negative growth of 19 per cent, Jharkhand 18 per cent and North East 15.9 per cent, whereas Assam (23.7 per cent), Haryana (19.5 per cent), Karnataka (13.5 per cent) and Tamil Nadu (13.9 per cent), recorded positive growth.
Among other steps, the Minister has asked members of Postal Services Board (PSB) to ensure 20 per cent revenue growth on sustainable basis.
Each member of the PSB has been asked to identify, commercialise and operationalise five major schemes of the Indian government, and partner with 5 PSUs and 10 corporate houses for commercial tie-ups with India Post with revenue potential of at least Rs 50 crore each.
DoP is also believed to be working towards setting up ATMs and offer debit cards for its customers.
"My vision is that post offices must become banks, so that an ordinary man can with Rs 10 open an account. We can set-up ATM machines for the e-banking...we can do e-retail," Sibal said.
According to officials, work for setting up 1,000 India Post ATMs is at an advanced stage and DoP has already held parleys with vendors on this front.
The Department is also working on providing skill development courses to its over 4.75 lakh employees with the Human Resources Development Ministry.
"The postman should also learn e-banking so that he can actually help the consumer on the ground. So, we are developing specialised skill development courses with the HRD Ministry," Sibal said.
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Telecom Minister Kapil Sibal wants to reach out to the masses in the rural areas with modern banking facilities through the post offices.
"We want to commercialise the department. We will seek a licence from the RBI to convert all our post offices into banks," Sibal told PTI.
The lack of modern banking facilities in rural areas and dependence of villagers on informal sector for their credit requirements has prompted the government to work on financial inclusion by way of setting up 'postal banks'.
"The State Bank of India can't build branches all over India, but there are post offices across India. The branches are already there, so infrastructure expenditure is not required. So you can actually give banking facilities at relatively lower costs, which would be extremely beneficial to people," he said.
The post offices currently offer financial services like savings bank, postal life insurance, pension payments and money transfer services. Its total corpus stood at Rs 5,82,832.9 crore as on March 31, 2011.
DoP's revenues grew 11 per cent to Rs 6,954.09 crore in 2010-2011 from Rs 6,266.70 crore in the previous fiscal.
However, negative growth rate in some circles has pushed the Department's deficit to Rs 6,625 crore in FY'11, almost equal to the annual revenue of the Department.
"I want to make the (postal) system commercialised. By corporatising over 1.5 lakh post offices across the country, the ministry is expecting to improve the quality of services, increase profitability and reduce prices," Sibal said.
Out of the 22 DoP circles, some circles like Chhattisgarh have reported a negative growth of 19 per cent, Jharkhand 18 per cent and North East 15.9 per cent, whereas Assam (23.7 per cent), Haryana (19.5 per cent), Karnataka (13.5 per cent) and Tamil Nadu (13.9 per cent), recorded positive growth.
Among other steps, the Minister has asked members of Postal Services Board (PSB) to ensure 20 per cent revenue growth on sustainable basis.
Each member of the PSB has been asked to identify, commercialise and operationalise five major schemes of the Indian government, and partner with 5 PSUs and 10 corporate houses for commercial tie-ups with India Post with revenue potential of at least Rs 50 crore each.
DoP is also believed to be working towards setting up ATMs and offer debit cards for its customers.
"My vision is that post offices must become banks, so that an ordinary man can with Rs 10 open an account. We can set-up ATM machines for the e-banking...we can do e-retail," Sibal said.
According to officials, work for setting up 1,000 India Post ATMs is at an advanced stage and DoP has already held parleys with vendors on this front.
The Department is also working on providing skill development courses to its over 4.75 lakh employees with the Human Resources Development Ministry.
"The postman should also learn e-banking so that he can actually help the consumer on the ground. So, we are developing specialised skill development courses with the HRD Ministry," Sibal said.
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