India Post to seek Banking License
India Post is the largest postal network in the world, comprising 1.55 lakh post offices, of which nearly 1.4 lakh are in rural areas. The department of posts is currently working on a plan to get a bank licence, which will be sent to the Cabinet for approval. Once it gets a go-ahead, the postal department will formally seek a licence from the Reserve Bank of India, to launch full fledged banking services.
What are the Opportunities?
- If India Post gets to start its own banking operations, it has the potential to emerge as one of the biggest banks in the country, thanks to its massive network and reach.
- The India Post already has some 23.75 crore individual savings bank accounts and offers a whole range of financial services such as postal life insurance, pension payments and money transfer services.
- One of the important opportunity will be a solid approach to aim of 100% Financial Inclusion. India Post has a huge network and wide reach in rural areas.
- It has 1.55 lakh Post offices nationwide, biggest postal network in the world.
- Out of them, 1.4 lakh are in rural areas.
- Post offices already offer insurance, pension and money transfer services. The department has an upgrade plan under which 811 ATMs at post offices will be placed soon for postal & other customers, for an amount of Rs. 1000 crore.
Is India Post unique example in world?
No. There are several successful examples, globally. France’s postal service, La Poste, began banking operations ‘La Banque Postale‘ in 2006. In 2007, it had more than 11 million accounts and accounted for almost 25% of the postal service’s turnover. Banking operations of Post Italiane has helped it return to profit and expand network.
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Month: Current Affairs - November, 2011