India Post to shake Nationalised Banks and Indian Banking industry

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

Rajya Sabha Question : Improvement in efficiency of postal services

GOVERNMENT OF INDIA

MINISTRY OF  COMMUNICATION AND INFORMATION TECHNOLOGY

RAJYA SABHA

QUESTION NO. 684

ANSWERED ON  28.11.2014

Improvement in efficiency of postal services

684  Shri A.U. Singh Deo

Will the Minister of COMMUNICATION AND INFORMATION TECHNOLOGY be pleased to state :-

(a) whether Government has proposed plans to improve efficiency of postal services, if so, the details thereof;

(b) whether Government is planning any Public Private Partnership model in postal services, if so, the details thereof;

(c) if not, the reasons therefor;

(d) whether there is any proposal to raise employment in postal services for rural areas, if so, the details thereof; and

(e) if not, the reasons therefor?

ANSWER

THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY

(SHRI RAVI SHANKAR PRASAD)

(a) Yes, Sir.

Performance of Post Offices is monitored on selected Key Performance Indicators (KPIs) on Mails, Savings Bank and Money Orders through a web based mechanism.

The Government has undertaken the following steps to improve efficiency of Postal Services by:

(i) Introduction of a Mail Network Optimization Project (MNOP), for consolidation and optimization of operational network.

(ii) Process redesigning at Speed Post Hubs and Intra Circle Hubs.

(iii) Strengthening of end –to-end online tracking system, resulting in increase in online tracking.

 (iv) Regular performance review of all Postal Circles.

(b) & (c) No Sir.

(d) & (e) There is no new proposal to raise fresh employment in postal services for Branch Post Offices situated in rural areas. In fact, whenever any vacancy arises in any Departmental cadre, irrespective of its location in rural area or urban area, the same is filled up as per the provisions of the Recruitment rules of that particular cadre. Till filling up of vacancy, the work of the post is managed by redistribution/combination of duties and temporary attachment of personnel from other Post offices etc.

There are sufficient numbers of sanctioned posts of Gramin Dak Sevak (GDS) employees in rural areas. In addition, the Department has recently directed for expeditious filling up of all vacant posts of Gramin Dak Sevak Branch Postmasters.

New RBI guidelines: India Post’s long wait to become a bank may be finally over - NEWS

The final guidelines on differentiated banks, spelled out by the Reserve Bank of India (RBI) on Thursday (27/11/2014), has paved the way for India’s postal department to fulfill its long-cherished dream of wearing the hat of a banker.

India Post is now likely to apply to become a small finance bank, according to a senior department official.

‘Certainly, it (the guidelines for small and payments banks), looks interesting,” the official told FirstBiz on condition of anonymity. The department will conduct a feasibility study and will take a final call on the matter, the official said.

On Thursday evening, the RBI announced the final rules for payments banks and small banks. Payments banks can engage in accepting small deposits, offer ATM/debit cards, payments and remittance services through various channels and offer financial products like mutual fund units and insurance products.

Small finance banks, on the other hand, are almost like full service commercial banks. But, these banks cannot engage in large value transactions since 75 percent of their loans must be lent to the so-called priority sector. For existing banks, this requirement is 40 percent. Also, at least 50 percent of their loan portfolio should constitute loans and advances of up to Rs 25 lakh.

What is means is majority of the loans of smaller banks must be lent to agriculture, micro-credit and other weaker sections.

But small banks have plenty of headroom to actively compete in the home loan and SME loan segments with other banks, even within this limit.

A small bank permit makes more sense to India Post than becoming a payments bank since the department has long cherished the dream of a lender.

The Postal department, which was among the 25 contenders for a full service banking licence last year, didn’t manage to get into the final list since the UPA-government wasn’t keen to support the move and refused to provide the department with the minimum capital required to set up a commercial bank.

But the government is unlikely to deny the chance to India Post this time since small finance banks will not deal in large value credit transactions.

Since the new set of banks will primarily operate among the unbanked and weaker sections, risks arising out of large-value corporate loans are limited.

Also, capital is unlikely to become a problem since under the new guidelines, both small banks and payments banks need an entry capital of Rs 100 crore, as against Rs 500 crore needed for full service banks.

According to the RBI guidelines, small finance banks can gradually grow to a full service commercial bank if the apex bank finds merit in the proposal.

Big boost to financial inclusion

India Post has all along argued that the department’s entry to banking can contribute massively to the cause of financial inclusion, or the process of spreading banking services to the unbanked population of the country, using its vast network of 1,55,000 post offices.

Of its total network, about 1,39,040 are in rural areas. Going by a 2011 estimate of the postal department, about 6,000 people are covered on average by post-offices in rural areas and about 24,000 in urban areas.

Through its various saving schemes, Postal department handles deposits to the tune of Rs 6,00,000 crore.

As First Biz noted earlier, India Post’s entry into banking can be game changer in rural banking given the massive reach of Post in the far-flung areas of the country and local knowledge.

The department has already commenced the process to link all its branches through technology, besides setting up ATMs across the country.

Last year, while issuing licenses to IDFC and Bandhan, the RBI had observed that India Post can be given banking licence if government, technically the promoter of the proposed Post bank, gives its nod.

Central govt employees to file assets details by December 31: Govt

New Delhi: All central government employees have to file the details of their assets and liabilities along with that of their spouses and dependent children as mandated under the Lokpal Act by December 31, the Lok Sabha was informed on Wednesday (26/11/2014).

As per the rules notified under the Lokpal and Lokayuktas Act in July this year, every public servant who has filed declarations, information and annual returns of property under the provisions of the rules applicable to such public servants shall file the revised declarations as on August 1 to the competent authority on or before September 15.

The provision of the said rules has subsequently been amended by which the time limit for furnishing of such information or return by public servants has been extended till December 31, Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh said in a written reply.

The declarations under the Lokpal Act are in addition to similar ones filed by the employees under various services rules.

All Group A, B and C employees are supposed to file a declaration under the new rules. There are about 26 lakh employees in these three categories, as per latest government data.

The Personnel Ministry has also issued new forms for filing these returns which have fields for mentioning details of cash in hand, bank deposits, investment in bonds, debentures, shares and units in companies or mutual funds, insurance policies, provident fund, personal loans and advance given to any person or entity, among others.

The employees need to declare motor vehicles, aircraft, yachts or ships, gold and silver jewellery and bullion possessed by them, their spouses and dependent children.

PTI 
Source : http://zeenews.india.com/

Introduction of Plastic Notes

 

It has been decided by the Government to introduce plastic notes in the denomination of Rs. 10/-. One billion plastic notes of the denomination of Rs. 10/- will be introduced in a field trial in five cities selected for their geographical and climatic diversity. The primary objective of introduction of polymer/plastic notes is to increase its life and not to combat counterfeiting. The cities selected for field train are Kochi, Mysore, Jaipur, Shimla and Bhubaneswar.

The Reserve Bank of India has informed that since the proposal is at a trial stage, the decision on replacement of currency notes with plastic notes will depend on the outcome offield trial.

This information was given by the Minister of State for Finance, Shri Jayant Sinha in written reply to a question in Lok Sabha today (28/11/2014).

Source : PIB

Pre-implementation activities towards preparedness of Branch Post Office for Rural ICT implementation:-

I.        The BO should have table to place the Handheld Device and for charging the device.

II.   The electrical power connection is required to charge the Solar UPS wherever power is available. In the locations where electrical power is not available, the UPS will be charged from Solar Panel.

III.   The locations where electrical power connection is there, it should have proper earthing and with one or two plug points along with on/off switch.

IV.   The above site preparation is to be done before the roll out starts for the particular Division.

V.   The data on BO such as the name of the BPM, contact details, address of the BO with land marks etc. may be updated and kept ready.

VI.   The availability of the network connectivity (Vodafone/ BSNL / Airtel etc.)at the BO location may also accessed and the best signal available in the BO may be identified and kept in order to facilitate the Vendor with details to drive best out of the project. If the network signal is not available, we have to identify as Off-line BO.

VII.   Similarly identification of the BOs where the solar UPS is not required due to installation problems of the solar panel or good power availability for more than 6 hours daily, has to be also done.  

To view the format for collection of desired information in respect of Branch Post Offices please Click Here.

The complete information in respect of all BOs is to be uploaded to the specific webpage domain name (to be circulated shortly) on the India Post website by 30-12-2014.

Source : Department of Posts (RB Division) Letter No.01-07/2014-RB dated 27-11-2014.

Expected Dearness Allowance from January 2015 for Central Govt Employees and Pensioners, almost confirmed 6% increase…

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