Anytime Anywhere Banking: Post Office as Chang Agent of Rural India
By: Gautam Bhattacharya
Finance minister in her recent Budget speech stated that 150,000 Post Offices of the country “will come on the Core Banking System enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs and also provide transfer of funds between post office accounts and bank accounts”. The declaration on inter-operability between the post office accounts and the bank accounts, has brought silver lining in the long-awaited aspiration of Anytime Anywhere Banking, particularly amongst the younger generation in rural India. Anytime Anywhere Banking facilitates the customer to carryout banking work from anywhere in the country irrespective of the location of his or herpost office orbank-branch and working hours of that office.
The urban India iswell exposed to the concept through a host of facilities viz. ATM, instant Fund Transfer, at par cheque etc. It’s almost one and a half decade now, that the concept Anytime Anywhere Bankingwas implemented by most of the PSU Banks in India. We moved a stage ahead when National Payments Corporation of India (NPCI), set up by the RBI, developed the Unified Payment Interface (UPI) for all retail transactions. The customers of urban India can now pay to the cab-driver, settle his dues inkirana shop, make payment to Dhobi direct from their Bank-accounts, provided two have Smart phones with them and bank accounts are linked with that phone. However, in rural India, where banking is done mostly through post office accounts, banking continued in traditional modes.
The work on Core Banking System (CBS) for nearly 25,000 departmental post offices in India, started around 2014, almost a decade afterCBS was initiated by the major PSUs. By 2018, nearly 85% of post offices were brought under CBS but rest were not having internet accessibility. That year the most challenging follow-up work had started: to integrate more than 130,000 rural branch post offices with the CBS post offices. The rural branch offices work for four to five hours a day and are like the extension counters of the nearest departmental offices located at Block or Taluka Headquarter. These offices are manned by the Grameen Dak Sevaks (GDS). SIM based handheld devices were provided to these branch offices to connect them with the remoteserver through internet. Nearly 2 lakh Grameen Dak Sevaks were trained for the operational work.
The system of integrated Core Bankingcovered nearly 93% of the Postal network by 2021. This facilitated disbursement of Direct Benefit Transfer (DBT) in the account of the beneficiaries of various social schemes including payments of MG-NREGS, collection of premiums of Postal Life Insurance (PLI) and Rural PLI etc. The Grameen Dak Sevaks did wonders in last three years in promoting digital transactions amongst people who have accounts in rural branch post offices. According to Annual Report (2020-21) of India Post, 43 crores on-line transactions involving an amount of Rs. 53,584 crores took place through these handheld devices in rural branch post offices.
Though no formal impact study has been made, prima facie it appears that integration of 130,000 rural Branch Post Offices with the Core Banking System of the country has similar demonstration effect on rural India as Computerized Railway Reservation booking had in urban India in mid-1980s. Computerized Reservation about four decades back, led people in the cities and towns to appreciate the convenience of the customers that a computerized system had facilitated. Grameen Dak sevaks have that knowledge and credibility to do the handholding of the rural mass in developing the habit of digital transactions.
However, the post offices in remote islands of Andaman & Nicobar and manyin higher altitude of Himalayas could not be integrated inCBS in the first go because of non-availability stable internet connection. The situation is improving gradually. Different islands of Andaman & Nicobar have recently been connected with Chennai through Optical Fiber Cable, laid over the seabed. This has facilitated integration of offices in remote islands to with CBS. All these initiatives of last few years have led government to announce that by this year integration of all post offices with Core Banking Systemwill be complete.
As on day post office account holders cannot transfer fund from their account to any bank account and vice-versa. Reserve Bank of India has now allowed inter-banking transaction facility viz. NEFT / RTGS for Post Office Savings Scheme Accounts. This will enable on-line transfer of funds between post Office accounts and bank accounts. This interoperability will facilitate an account holder of bank to transfer fund to his PPF account or SukanyaSamriddhi Account (SSA) standing at the post office.
Customer expectations are changing fast even in smaller towns and in rural India.Post Office Banking system has to rise in tune with the expectations of the modern generation. A customer of post office account has no option but to go to the nearest departmental post office, to open / close savings certificate accounts or to open a PPF, MIS or a Sr. citizen account. For a villager this meant loss of one day and transportation expenses. Even today, on opening a savings account in a post office, a customer has to ask for an ATM card or a chequebook. Such basic instruments are seldom provided to the account holder by default. Concept of at-par-cheque is required to be introduced by the postal department. It is expected that upgraded Net Banking / Mobile Banking of post office will address this year all these deficiencies for implementation of Anytime Anywhere Banking in truest sense of the expression.
Gautam Bhattacharya – Former Civil Servant who at the time of superannuation was in the grade of Addl. Secretary to the Govt. of India. Sh. Bhattacharya studied Economics in Presidency College, University of Calcutta and in Indian Statistical Institute and had professional Trainings at EPFL Lausanne and at International Anti-Corruption Academy, Vienna. Before joining higher Civil Services of the Govt. of India, he taught post-graduate students of Economics in two Universities.