Indian Post Office Act to be amended soon to enable post offices
to offer regular banking services and sell insurance.
The Department of Posts (DoP) could soon find itself competing
with the likes of the State Bank of India and HDFC Bank as the government will
soon make amendments to the 'The Indian Post Office Act, 1898' paving the way
for the former to offer banking and insurance services.
According to reports, the draft amendment bill to make necessary
changes in 'The Indian Post Office Act, 1898' has been circulated by the DoP
for enabling post offices to enter banking and insurance sector. The Planning
Commission is currently vetting the proposal to convert post offices across the
country into full fledged banks and provide insurance service.
Sources say that the government wants to give a completely new
dimension to the way post offices conduct business in the country and the
proposed bill could prove to be a definitive step towards that goal. The same
was conveyed by the telecom minster Kapil Sibal recently when he had said that
the government wants to commercialize the department and will soon seek a
license from the central bank to convert post offices into banks.
With nearly 1.5 lakh post offices spread across India, the DoP has
one of the largest branch networks in the country. Once in place, the change
could allow it to tap into its vast geographic reach and extend modern banking
services to masses, especially those living in the hinterlands.
While the DoP has continued to diversify its services portfolio
with time—extending its set of services to include everything from financial
services like savings bank, postal life insurance, pension payments, money
transfer services, rail reservation and telephone recharge coupons—the move to
offer full fledged banking and insurance services could prove to be a
significant milestone in the history of the department.
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