PRESS NEWS

Panel for immediate banking, insurance services by post offices

 

NEW DELHI: Government should set up a holding company under the Department of Posts for immediate roll-out of banking, insurance and e-commerce services by the 1.55-lakh strong postal network, according to a report by a high-level panel.

The holding company should have five different verticals, and three of them-- banking, insurance and e-commerce --can start working immediately, said the 'Task Force on Leveraging the Post Office Network', which submitted its report today to IT & Telecom Minister Ravi Shankar Prasad.

The report said that e-commerce could be the second largest activity after banking that DoP can foray into for emerging as one of biggest players in the world.

The panel also suggested establishing Post Bank of India as a separate entity with a branch in each district in the first three years with initial capital of Rs 500 crore to be funded by the government.

Post Bank of India and Prime Minister's Jan Dhan Yojana can compliment each other for financial inclusion, TSR Subramanian, who headed the task force, said.

The panel noted that post offices have over Rs 6 lakh crore in deposits which is second only to that in country's largest bank SBI.

The committee has estimated that restructuring of postal network can lead to direct job creation in excess of 5 lakh within 3-5 years apart from other indirect jobs.

"We have proposed a holding company under the Department of Posts with 5 different verticals. Three verticals- Banking, Insurance and E-commerce --can start working immediately.

"Government services and B2B vertical can start as we go along," Subramanian, also a former Cabinet Secretary, said.

The task force was set up to study leveraging of postal networks for providing multi-disciplinary services to both individual and businesses.

"The committee has given its suggestion which government will seriously consider. Government will come up with a structured response on recommendations made by the committee. But I would like to assure that not a single person in DoP will lose job as we undertake reforms," Prasad said.

The committee said losses incurred on sale of on post cards, inland letters, speed post, which are subsidies, is one of the main reasons for the poor financial health of DoP.

It, however, suggested that India Post should continue to offer these services at relatively lower cost as it is the obligation of Government to give affordable communication tools to the public.