PostOffices as Banks – Pros & Cons

We all know that Post offices have been doing a stupendous service for the nation. However with technological advancement like email and mobile may have had reduced the work load of the post offices.

However Post Offices have a lot to gain by going the banking way as they have far and wide branches flung in far distant areas and it appears that dream is likely to turn into a reality if Post offices act with some action plan as enumerated in reply submitted by Minister of State in the Ministry of Finance (Shri Namo Narain Meena) to a question on the subject in Rajya Sabha and same is as appended below:

Department of Posts raised a proposal for setting up the Post Bank of India and providing banking services with a network of 1.55 lakh post offices with special focus on rural areas and financial inclusion. Reserve Bank of India (RBI) has informed that all commercial banks have been constituted by the Government by various Acts of the Parliament. Hence, to set up the Post Bank of India (PBI) by an Act of Parliament, necessary legislation will need to be framed and passed by the Parliament. Or to set up the Post Bank as banking company, the same would require a banking licence from RBI as per RBI’s extant guidelines issued in February, 2013. RBI is of the view that it is useful to take up a detailed Cost Benefit Analysis on the proposal. In addition, viability and strategic study, market research, business plan and profitability analysis including business projections for next 4-5 years needs to be carried out to assess the commercial viability of the proposal.

Hope to see the banking giant waking up and provide the banking services even in far flung areas and it is just a matter of time that we will see each individual will have access to basic facilities in life and banking is one of them as it inculcates the sense of saving and will also help them get rid of the clutches of the local money lenders as they are charging them exorbitant interest rates in the name of convenience. Hope by virtue of penetration of postoffices as banks people will also be able to use Jackpot tip from far flung places also.