The
initiative of India Post to connect Post Offices through Core Banking
Solution will shake the banking industry shortly. Even though Post
offices are doing Small saving activities as an agent of Ministry of
Finance, they have the potential in terms of deposit backings, wide
network across the country and strong employee support to shake the
industry.
Post
Office Savings Bank (POSB) which is called as Poor’s Bank has the major
share of Deposits in India compared to any other banks. Since India
Post is a government Institution working without profit motive, getting
the exact figures of deposits and number of account was difficult
compared to full-fledged banks with corporate entity. So till now the
actual figure were unknown to everyone.
Now
the scenario has been changed when Post Offices started getting
migrated to Core Banking Solution. When a Post Office gets migrated,
the exact figures of number of accounts and total deposit amount will be
generated. Through this figures everyone can see the strength of Post
Office Saving Bank in India.
India
Post successfully migrated its first office to Core Banking in December
2013. Like any others big public sector and private sector banks, India
Post is using Finacle, the leading Core Banking Solution from Infosys
for their banking renovation. Now India Post is near to reach its first
milestone of 1000 CBS Post Offices in India and expecting this by
December 2014. Till 27.11.2014 total of 961 Post offices have been migrated to CBS platform.
India
Post is planning to include 25000 plus Post Offices in Core Banking
network with in few years. By this mission all the departmental Post
Offices will come under this CBS category Post Offices. Now itself all
these offices are computerised and they are doing banking transactions
using Sanchay Post software. Even if we take number as 25000, the figure
is not at all a small one when compared to other big nationalised
banks.
As
per the Annual Report 2013-14 State Bank of India has only 16069
branches including 15869 domestic branches and 190 foreign branches. If
we include the branches of Associate banks too, a count of about 5700
more branches will be added to this list. Even after adding the
associate banks to this list SBI have only 21769 branches across the
world. The second largest public sector bank is Punjab National Bank.
They are following far behind with only 6206 branches (6201 domestic
branches and 5 foreign branches)
If
we take the amount of deposit as criteria, India Post will again be the
number one in the industry. Only 961 Post Offices have been migrated
to Core Banking till 27.11.2014, but the value of deposits in these
migrated offices crossed Rs. 87204 Crores. Total of 5.51 Crores account have been migrated to this new platform. This is from only nearly 4% of
total Post Offices to be migrated to Core Banking. If we take the
proportionate figure, deposits will surely cross 20 Lakh Cores rupees
after migration of all computerised Post Offices. State Bank of India
have only deposit of rupees 13.94 Lakh Crores as per annual report
2013-14. Number of branches and total deposit value of major
nationalised banks are shown below for comparative analysis.
SL NO
|
Name of Banks
|
No. of CBS branches
(as on 31.03.2014)
|
Total Deposit
( in Crores)
|
1
|
India Post (POSB)
|
*25000
|
*22,68,574
|
2
|
State Bank of India
|
16069
|
13,94,409
|
3
|
Punjab National Bank
|
6206
|
4,51,397
|
4
|
Bank of Baroda
|
5062
|
5,68,894
|
5
|
Canara Bank
|
4755
|
4,20,723
|
6
|
Bank of India
|
4671
|
4,78,695
|
7
|
Central Bank of India
|
4336
|
2,40,069
|
8
|
Syndicate Bank
|
3251
|
2,12,343
|
* Expected numbers after migration
Commercial
banks are attracting customers by giving value added services like ATM,
Debit/Credit cards, Internet Banking, mobile banking, etc. Now most of
the people are depending banks for such needs. In order to compete with
commercial banks or for attracting new customers or giving more value to
their account holders, India Post started various value added services
like Internet Banking, ATM, etc. Now the ATM facility is introduced in
limited areas but the Department of Post is planning to install 2800
ATMs by the end of 2015.
By
the end of 2015 CBS network of India Post may be connected to other
banking networks and thereby a Post Office customer can make use of all
the facilities (except loans) now a commercial bank customer can enjoy.
If the value added services of India Post is a success, surely it will
lose the customers of commercial banks. And in such circumstances people
in the rural areas will not approach Banks, normally located in urban
or semi-urban areas for transacting in SB accounts. Now Savings Bank
account in Post Office are not attractive only because of lack of
availability of value added services like ATM, Debit cards, net
banking,etc. Now Department of Post is taking all efforts to fill this
gap occurred in the past.
Finally
expecting that today’s technological renovation of India Post will
surely shake Indian Banking industry in near future in various ways.
Let us wait and see.
Written by: The Publisher, www.postbankofindia.org
