We are extremely sensitive to the fact that on account of its vast network, good accounting systems and the trust that the postal department enjoys amongst the people, it has immense potential to become an integrated financial services delivery channel for all citizens, says Manjula Prasher, Secretary, Department of Posts, in an exclusive conversation with Dr Gursharan Dhanjal, Editor, Inclusion
Q: What is your roadmap for financial empowerment of rural India and also making Department of Posts an integrated financial services delivery channel?
A: With more than 133,000 Post Offices in rural areas, the Department has been contributing to inclusive growth. With more than 250 million savings accounts, we have also been contributing to financial inclusion of the people who do not have access to banking facilities in the country. In order to further target financially excluded households, it has been decided to embark upon a scheme to open at least one savings account per Below Poverty Line (BPL) household in the country. During last three months we have already opened more than 8.2 million such accounts in the rural post offices.
Under Rural Postal Life Insurance (RPLI) the Department has issued over 17.3 million policies to the rural population. Presently, we are focusing on expanding the Life Insurance net by organizing workshops and ‘Rural Postal Life Insurance Melas’ for insurance literacy and on the spot medical check-ups. This has been an integral part of Minister’s 100 days program.
Under Rural ICT Project 2012, all 123,000 rural branch post offices will be provided handheld devices to deliver all postal services including banking and life insurance. This will be linked to our central servers. The Rural ICT Project will take the benefits of core banking, computerized operations and Track and Trace facility to the doorsteps of rural population.
Q: Could you highlight the main tenets of India Post 2012 Project that aims at transforming DoP into a technology enabled, self-reliant market leader.
A: The Project entails setting up of our IT infrastructure including Data Centre, Disaster Recovery Centre and a Wide Area Network linking 30,000 departmental post offices and administrative offices. Rolling out integrated, centralized and scalable solutions for all our operations as well as finance and ERP are also part of this Project. The Government has approved the implementation of the IT project and we are in process of finalising the System Integrators and vendors to develop the IT solution and establish the IT infrastructure.
Q: What is being done to leverage the Post Office network exploring other business linkages/opportunities with industry to harness its full potential as a business hub?
A: The world over there has been a trend of decline in traditional letter mail during the last decade and India Post is no exception. The corporate mail has compensated to some extent but the future lies with 3-dimensional mail that includes packets, parcels and logistics integrated with e-commerce.
While on one hand Department is focusing on its core business i.e. Mails, Speed Post, Parcels and Savings Bank by improving the quality of service and setting up of a robust IT backbone for end to end tracking of transactions delivered for or originating from rural areas, on the other hand it has diversified the product offerings to leverage the vast network. The initiatives taken up in this sector include web-enabled service e.g. e-Post, e-Payment, Instant Money Order, e-Money Order, tie-up with international Money Remittance firms, retailing of products including gold coins, verification of customer addresses for service providing agencies like LPG suppliers, etc.
The challenge lies in converting this presence into one of the primary point of social fulfillment as well as creating business opportunities by establishing supply chain network upto semi-urban areas. Logistics and warehousing on a larger scale is a new area for us and will be one of our focal points during the 12th Five Year Plan. We have already established a logistics model for National and State routes and presently we are in the process of developing a stable transport infrastructure through Departmental/Leased /PPP models for both ‘Air’ and ‘Surface’ logistics.
In this context, it would not be out of place to mention that the Department undertook booking, transportation and delivery of more than 20,000 tons of material of RGI for the Census exercise from around 20 printing hubs to across the country in a time bound manner through dedicated hired transport. The consignments were tracked from booking to delivery in a time bound fashion involving a distribution chain upto Taluka/Block level in different geographical regions. The Department has also printed and dispatched 25 million UID cards across the country.
Q: The Posts network has the potential of retailing loan products, mutual funds, and other new age financial products including, micro-insurance, micro-lending, livelihood linkages, pension, remittances, etc. Your comments.
A: The Department has its own micro-insurance products, which it is selling through all the post offices. As of now there is no plan to retail micro-insurance products of other insurance companies. We feel that there is already a huge potential under Rural Postal Life Insurance scheme and the Department is positioning itself to earn more revenue through its life insurance operations.
Regarding micro-finance, micro-lending etc. the challenge before the Department is that we are not a full-fledged bank at present. We have moved a proposal for creation of a Post Bank for which requisite approvals have been sought. Talking of money remittance services, I am happy to inform you that the Money Order Service has been revamped in the recent past by introduction of Electronic Money Order and Instant Money Order. While Electronic Money Order is a system that facilitates remittance of MOs upto Rs 5,000/- electronically, Instant Money Order (iMO) is an online domestic money transmission service wherein a person can send an amount up to Rs 50,000/- in one transaction. At present iMO service is available from 9,256 Post Offices across the country.
Under RPLI the Department has issued over 17.3 million policies to the rural population. With more than 250 million savings accounts, we have also been contributing to financial inclusion of the people who do not have access to banking facilities
As far as pension is concerned the Department is already retailing New Pension Scheme (NPS) as Point of Presence (POP), appointed by Pension Fund and Regulatory Authority (PFRDA).
Q: What potential do you see for DoP to deliver social security schemes like MGNREGS, NRHM etc through its system?
A: Post Offices and postal personnel enjoy the trust and confidence of the people, as our Gramin Dak Sewaks are largely drawn from the local communities. It is not surprising, therefore, that many surveys and studies (e.g. World Bank’s Rural Financial Access Survey) suggest that post offices in India have closest proximity to our rural population as compared to branches of commercial banks, cooperatives etc. Additionally, we are fairly evenly distributed throughout the country and are under a centralized command.
In the light of all these factors, we are the most suitable organization to deliver Government’s Social Security schemes through our network. In fact, Post Offices are currently engaged in wage disbursal to MGNREGS workers. During last three years, we have been able to open Savings Bank accounts of more than 50 million workers and disburse MGNREGS wages amounting to nearly Rupees 30 billion to them at regular intervals. Similarly, Post Offices are disbursing pensions under Indira Gandhi Old Age/Widow/Disabled Pension schemes through a combination of its savings and remittance products.
Q: The Department of Posts was to collaborate with private sector banks to enable people in the villages conduct non-cash based transactions, but this scheme is yet to take-off. Your views?
A: The Department had selected three Banks viz. ICICI Bank, IDBI Bank and HSBC to start white label Pre-paid Cards with their collaboration and got permission from RBI. However, requisite approvals could not be received by the selected banks for this white label card project. Now, the Department is at an advanced stage of introduction of Core Banking Solution (CBS) in the Post Office Savings Bank, which will enable the Department to launch its own cards using its own technology platform.
Q: Can you tell us about progress on the entrepreneurship programme for skill and capacity development of officials of the postal department?
A: The Rural Entrepreneurship Programme aims to equip the Branch Postmasters and Gramin Dak Sewaks with the skills and knowledge to develop postal business as an enterprise; build their capacities to be able to efficiently deliver Government social security and development programmes and enable Post Offices to serve as a critical infrastructural support to trade and industry.
During the 11th Five Year Plan period, training was given greatest priority by us. Apart from training 350,000 Gramin Dak Sewaks, the Department continuously and constantly trains and retrains its employees through its 225 Workplace Training Centres, 6 Postal Training Centres and the apex National Postal Academy.
Q: How about e-Post Office?
A: The e-Post Office launched by India Post is a pilot project with limited scalability. We are offering online purchase of philatelic material at present. The experience so far has helped India Post to gain operational and strategic understanding in running e-commerce business. At present, we are at an advanced stage for offering SBI’s payment gateway also for e-Post Office. After its introduction, Money Orders can also be booked through e-Post Office. Our target is to scale up the e-Post office as a full fledged e-market place for all type of e-services by completion of vision 2012 project.
Q: Is there any role envisaged for Panchayats vis-à-vis Post Office system as well?
A: With its established systems that facilitate delivery of physical mail and financial services, as well as its vast network, India Post is an important organisation to provide infrastructural support to Panchayats. In fact, in the case of many Panchayats, Post Offices are the only agency to provide them with such support. Department of Posts runs a scheme, named Panchayat Sanchar Seva Yojana, through which a Panchayat can engage a person for delivery of postal services within its jurisdiction, while the Department pays a fixed remuneration along with incentives for extra work to that person.
Q: Would it be correct to say that the Department of Posts has a multi-pronged approach with a single vision?
A: It is our obligation to provide Universal Service to all the citizens. At the same time it is also considered a commercial Department. Hence, the twin challenges before us are to continue to provide affordable and efficient postal services to the entire population and at the same time, to increase its revenue share in the market. Accordingly, the vision of the Department is that its products and services are the customer’s first choice.
Keeping this mind, the Department has taken new initiatives like, Project Arrow, India Post IT Project 2012, Mail Network Optimisation Project etc. Training of our human capital is an integral part of all these Projects.
Project Arrow aims at modernizing the Post Offices and making visible, tangible and noteworthy differences in those postal operations that matter to “Aam Aadmi”. Under 12th Plan it is proposed to improve the ‘Look and Feel’ under Project Arrow for 2,500 Post Offices at an estimated expenditure of Rs 2.5 billion.
In order to optimize the existing mail network of Department of Posts and streamline mail operations a major initiative called Mail Network Optimization Project has been taken. We have increased the operational efficiency and percentage of speed post delivered on time as a result of strengthening of tracking and monitoring system.
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