Sibal to convert 1.5 lakh POs into banks; to seek RBI nod

New Delhi (PTI) - The humble Indian 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.
Indian 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.