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Thursday, February 10, 2011

Rural post offices may set up ATMs

NEW DELHI: The government may allow post offices to set up automated teller machines, or ATMs , at rural areas, in an attempt to further strengthen the role of India Post in financial inclusion.

India Post, which is working on major improvements in the payment process for social sector schemes like NREGA, will set up ATM networks in selected areas to give people access to online banking services.

"Central, state and local governments are increasingly preferring government benefit payments to be routed through banks rather than using postal services. We need to innovate so as to continue to play dominant role in financial inclusion," said a senior official with ministry of communications and information technology.

According to the official, the move to provide ATM services to its account holders will put them on a par with banks and other financial institutions working in this space and further strengthen their case for a banking licence.

Earlier, a committee on micro finance and poverty alleviation working under the aegis of Planning Commission had also suggested setting up of Gramtells (rural ATMs) at Post Offices. At present, only 45% of the Indian population has access to basic banking services.

The Postal Department, with its 1.55 lakh branches, already offers a host of financial services such as life insurance. "We are working towards convergence of the reach of Postal Offices with the government's financial inclusion agenda," said the official.

The plan for integration between different arms of the government on financial inclusion was also discussed in a meeting of the Committee of Secretaries, held last week.

"Various mechanisms have been proposed (for convergence) and are being discussed," confirmed a finance ministry official. The government is looking at opening five crore accounts in the selected 73,000 villages having a population of up to 2000, by March 2012.

Source: The Economic Times, Feb. 7, 2011

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