INDIA POST – IT CAN BECOME THE BIGGEST BANK!

Sending a letter? Or receiving a letter? Meeting the postman?

Well, these things, which were such a day-to-day activity of the past, is today a rarity; most of the new generation kids have never even seen a postman, forget receiving a letter, which is today referred to as ‘snail mail.’

But in India, the postal services continues to live and thrive. We do see the postman, once a year, to collect the Diwali “bakshish” and even if we might not have got a single letter, for old times sake, we give him generously.

Why are we talking about India Post today? Actually, we were completely floored to read a news which said that the postal department receives an average of 24 lakh complaints a year for non-delivery, delay and other such lapses.  As on 21 November 2019, all the cases from the past three years and 95% of the cases from 2019-20 were resolved.  24 lakh complaints and almost all resolved? That too without an ombudsman?

This data from various post offices across the country was shared by the Govt in the Parliament. The data showed that 96% of these complaints were about delayed services, 55% pertaining to the delivery of articles. The overall trend shows that the number of complaints regarding delayed delivery went up from around 5.6 lakh cases in 2017-18 to more than 10.3 lakh cases in 2018-19 which dropped to 4.85 lakh cases in 2019-20. During the same period, complaints about non-delivery had dropped from nearly 36,000 to about 13,000. As per the government data, all these complaints received during each of the last three years have been resolved. 

Maharashtra accounts for more than 13% of all the complaints registered with respect to delivery of mail services in the last three years from FY18 to FY20. Haryana accounts for nearly 12%, followed by West Bengal and UP at 8% each.

The significant aspect about India Post is that it is relevant even in today’s age of electronics and digital platforms, only on account of its small savings schemes. It offers some nine schemes - Post Office Savings Account, 5-Year Post Office Recurring Deposit Account, Post Office Time Deposit Account, Post Office Monthly Income Scheme Account, Senior Citizen Savings Scheme, 15-year Public Provident Fund Account, National Savings Certificates, Kisan Vikas Patra and Sukanya Samriddhi Accounts.

Almost everyone who you see in the post office today is there to either get the passbook updated or put in more money or withdraw money from these various schemes offered. These schemes are in demand due to the high interest rates and also on account of providing security and stability. For majority of the senior citizens, post office schemes are the most preferred. Owing to the massive consumer base, such schemes are one of the major sources of revenue for the post office while earnings from money orders, postage stamps have become almost extinct.

The Indian postal services are today more of a bank and its reach is right into the hinterlands. This network and reach, the trustworthy image of the postal services should be banked on further – the evolution of this very important arm is imperative. The India Post Payments Bank is already up and functional – it is a payments bank, can accept deposits to the tune of Rs.1 lakh but cannot lend.

Plans have been around to go public for a long time, to convert India Post’s massive 4.2-lakh workforce and 1.56 lakh-strong post office network into banks, with postmen transforming into banking correspondents while post offices will work as bank branch extensions for deposits and loans.

In July 2013, India Post did apply for a universal banking licence but RBI did not approve as it was averse to creating another public-sector bank. In 2015, India Post got the payments bank licence.

The plan taking shape now is that India Post Payments Bank, with its 14,000 strong branch network of 45 regional rural banks (RRBs) will be brought under the fold of India Post. The Govt will control 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 will also be made a subsidiary of the holding company.

This is huge and if it happens, maybe we could see more of the postmen and a visit to the post office might become quite routine!