Tuesday, July 28, 2020
Government working on a plan to revamp India Post; could soon turn into a full fledged bank
Loss-making India Post, having a size and workforce hugely disproportionate to its shrinking role, may reinvent itself by becoming a full-fledged bank.
India Post’s FY20 pay and allowances were estimated to be Rs 17,451 crore or in FY20 or 142% more than revenues of Rs 12,211 crore.
Loss-making India Post, having a size and workforce hugely disproportionate to its shrinking role, may reinvent itself by becoming a full-fledged bank. According to a plan being discussed in the government, the 14,000 strong branch network of 45 regional rural banks (RRBs) will be brought under the fold of India Post, which itself runs 1.56 lakh post offices in the country. The Centre will wield control over the proposed bank via a holding company, of which the RRBs, where the Centre already holds 50%, will become subsidiaries. The existing India Post Payments Bank (IPPB)will also be made a subsidiary of the holding company.
The other shareholders in the RRBs, namely public sector banks (35%) and the state governments (15%), will have the option to retain the stakes or monetise the same by selling these to the Centre.
Currently, IPPB, as a payments bank, can’t accept deposits above Rs 1 lakh per customer; also, it can’t lend.
The proposal to make India Post a bank goes with the government’s plan to consolidate PSBs and bring down their number eventually to four or even less. At one point, it may so occur that only the State Bank of India and the proposed India Post Bank will remain in the public sector as two large banks and also be vehicles for assorted government transfers to people. Also, the proposed bank, even while sticking to RBI’s prudential norms, can’t neglect lending to priority sectors like agriculture, MSMEs, education and affordable housing.
Even now, India Post, which runs the ubiquitous post offices in the country and popular savings schemes, performs additional functions like distributing MGNERGS wages.
Explaining the rationale behind the proposal, official sources said RRBs will bring in a readymade deposit and lending portfolio for the proposed India Post Bank to build on. Once the RRBs are brought under a common management, their efficiency will improve and common practices will be implemented across the networks, they added.
RRBs are relatively better off financially compared to India Post, which is estimated to have posted its highest-ever loss of Rs 18,255 crore (also highest by any public-sector entity) in FY20. RRBs posted a loss of Rs 548 crore in FY19 compared with a net profit of Rs 1,501 crore in FY18. Outstanding advances of RRBs stood at Rs 2.8 lakh crore as on March 31, 2019, up 11.3% on year. About 91% of their loans were to priority sectors such as agriculture, MSMEs, education and housing.
The government has taken various initiatives for making the RRBs economically viable and sustainable institutions. With a view to enable RRBs to minimise their overhead expenses, optimise the use of technology, enhance the capital base and area of operation and increase their exposure, the Centre has initiated structural consolidation of RRBs in three phases, thereby reducing the number of RRBs from 196 in 2005 to the present 45. During the period, the Centre and other shareholders have infused more than Rs 6,000-crore equity in the RRBs to maintain the mandatory capital to risk weighted assets ratio (CRAR) of 9%.
“Some RRBs are extending a lot of credit but have very limited capital, others are over-capitalised but not extending much credit. When these are unified under a holding bank there will be tremendous efficiency of pooled capital,” an official said.
Combining RRBs with the distribution network of postal services will provide a good mix as 90% of the postal branches are in rural areas while 80% of RRBs loans are in rural areas, even as they are gradual entering into urban areas. “The two networks will complement each other, multiplying their growth potential,” he added.
India Post’s massive 4.2-lakh workforce and 1.56 lakh-strong post office network will provide a tremendous platform as postmen will be converted banking correspondents while post offices will work as bank branch extensions for deposits and loans.
Like other loss-making public-sector enterprises, India Post’s finances are weighed down by high pay-and-allowance costs, now at over 100% of its annual revenue. India Post’s FY20 pay and allowances were estimated to be Rs 17,451 crore or in FY20 or 142% more than revenues of Rs 12,211 crore. Including pension costs of another Rs 10,271 crore, the employee cost itself was Rs 27,722 crore in the last fiscal, more than double the total receipts.
There exists a huge mismatch between product costs and pricing of India Post; also the availability of cheaper/faster substitution to traditional mail services have dented its revenues. On the revenue front, India Post is largely defendant on remuneration for the National Savings Schemes and Saving Certificates, which contributed 65% of its revenue in FY20, while postage services generated only 27% of revenues.
In July 2013, the postal department applied for a universal banking licence as RBI invited applications for a new round of bank licences. However, it didn’t got approval at that time since the central bank was averse to creating another public-sector bank. In 2015, India Post got the payments bank licence.
The expenditure finance committee, headed by the expenditure secretary, had told the postal department last year that it has to be self-sufficient by levying adequate user charges as the Centre’s Budget could not absorb such recurring annual losses.
Ministry of Personnel, Public Grievances & Pensions Government employees retiring during COVID pandemic will be receiving “provisional" pension till their regular Pension Payment Order is issued: Dr. Jitendra Singh
Government employees retiring during COVID pandemic will be receiving “provisional" pension till their regular Pension Payment Order is issued: Dr. Jitendra Singh
Posted On: 27 JUL 2020 6:35PM by PIB Delhi
Government employees retiring during COVID pandemic will be receiving “provisional" pension till their regular Pension Payment Order (PPO) is issued and other official formalities completed.
Union Minister of State (Independent Charge) Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh said that after the Modi Government took over, the Department of Pensions had upgraded and equipped itself to deliver the PPO to the concerned employee without delay on the day of his or her superannuation. Besides this, in the last few years, taking cue from Prime Minister Narendra Modi’s emphasis on digitalization, the Department of Pension also created a Portal, which could be accessed by any government employee approaching superannuation to find out the status of his or her pension papers, he said.
However, because of the disruption in the official work due to COVID pandemic and lockdown, Dr Jitendra Singh said, some of the employees who had retired during this period may not have been provided with PPO. But, as an evidence of the present government's sensitivity towards the pensioners and the senior citizens, a decision was taken that in order to avoid a delay in the start of regular pension covered under CCS (Pension Rules) 1972, the rules may be relaxed to enable seamless payment of “Provisional Pension” and “Provisional Gratuity” till the regular PPO is issued.
As per the OM (Office Memorandum) issued by Department of Pensions, affiliated to the Ministry of Personnel, the payment of “Provisional Pension” will initially continue for a period of six months from the date of retirement and the period of “Provisional Pension” may be further extended up to one year in exceptional cases. These instructions shall also be applicable in cases where a government servant retires otherwise than on superannuation i.e. voluntary retirement, retirement under FR 56, etc.
Dr Jitendra Singh said, this decision has been taken considering that because of the constraints of pandemic and lockdown, a government servant may find difficulty in submitting his Pension Forms to the Head of Office or may not be able to forward the Claim Form in hard copy along with Service Book to the concerned Pay & Accounts Office in time, particularly when both the offices are located in different cities. This is very pertinent to Central Armed Police Forces (CAPFs) who are constantly on the move and whose Heads of Offices are located in cities different from where the Pay & Accounts Office is located.
Vide another circular, Department of Pension & Pensioners' Welfare (DOPPW) has directed all offices maintaining GPF (General Provident Fund) Accounts to complete all credit entries including accruing interest to the employees two years before retirement and then one year before retirement so that Provident Fund is also paid accurately in time
General Provident Fund (GPF) Interest Rate from July to September 2020
(TO BE PUBLISHED IN PART I SECTION 1 OF GAZETTE OF INDIA)
F. NO. 5(2)-B(PD)/2020
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)
New Delhi, the 13th July, 2020
RESOLUTION
It is announced for general information that during the year 2020-2021, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 7.1% (Seven point one percent) w.e.f. 1st July, 2020 to 30th September, 2020. This rate will be in force w.e.f. 1st July, 2020. The funds concerned are:
1. The General Provident Fund (Central Services).
2. The Contributory Provident Fund (India).
3. The All India Services Provident Fund.
4. The State Railway Provident Fund.
5. The General Provident Fund (Defence Services).
6. The Indian Ordnance Department Provident Fund.
7. The Indian Ordnance Factories Workmen’s Provident Fund.
8. The Indian Naval Dockyard Workmen’s Provident Fund.
9. The Defence Services Officers Provident Fund.
10. The Armed Forces Personnel Provident Fund.
2. Ordered that the Resolution be published in Gazette of India.
(Anjana Vashishtha)
Director (Budget)
Sunday, July 26, 2020
India Post, Mumbai launches distinctive waterproof Rakhee envelopes
India Post, Mumbai launches distinctive waterproof Rakhee envelopes
Mumbai, India Friday 24 July 2020: With the Raksha Bandhan festival round the corner, India Post, Mumbai has launched a special kind of envelope to carry rakhis to deliver them to their destinations in minimum time period. The envelope is a non-tear, water-resistant self-adhesive envelope with interplay of vivid colors throughout. Reasonably priced at Rs 10, these special envelopes will be available in all the post offices from Saturday, July 25th.
“These envelopes bearing distinctive characteristics are an innovative attempt of India Post, Mumbai, to keep the spirit of love and festivity unabated, even at times of crisis and to strengthen the emotions of love and brotherhood amongst people” said Ms Swati Pandey, Postmaster General, India Post, Mumbai. She further said that all mails of Raksha Bandhan will be treated as first class mail, helping them reach their destination before/on the day of the occasion, by latest, at the cost of an ordinary mail. The colourful design of the envelopes will facilitate its easy identification and aid quicker transmission. “Even during this critical period of partial lockdowns and challenges, India Post will ensure that all mails related to Raksha Bandhan reach their destinations”, the Post Master General added.
Similar special envelopes have been introduced in other postal circles as well.
Mumbai, India Friday 24 July 2020: With the Raksha Bandhan festival round the corner, India Post, Mumbai has launched a special kind of envelope to carry rakhis to deliver them to their destinations in minimum time period. The envelope is a non-tear, water-resistant self-adhesive envelope with interplay of vivid colors throughout. Reasonably priced at Rs 10, these special envelopes will be available in all the post offices from Saturday, July 25th.
“These envelopes bearing distinctive characteristics are an innovative attempt of India Post, Mumbai, to keep the spirit of love and festivity unabated, even at times of crisis and to strengthen the emotions of love and brotherhood amongst people” said Ms Swati Pandey, Postmaster General, India Post, Mumbai. She further said that all mails of Raksha Bandhan will be treated as first class mail, helping them reach their destination before/on the day of the occasion, by latest, at the cost of an ordinary mail. The colourful design of the envelopes will facilitate its easy identification and aid quicker transmission. “Even during this critical period of partial lockdowns and challenges, India Post will ensure that all mails related to Raksha Bandhan reach their destinations”, the Post Master General added.
Similar special envelopes have been introduced in other postal circles as well.
Saturday, July 25, 2020
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