Wednesday, February 10, 2016


A modernization drive has hampered sales of small savings schemes in post offices. The department of posts is in the process of implementing core banking systems (CBS) since last one year, to link around 25,000 offices. The teething troubles and frequent server failures have crippled work at post offices. Due to this, there has been a major dip in collections in savings schemes, which have been traditionally the domain of post offices. 

Banks have mopped up Rs24,536 crore as per the latest data. As against this, collection at post offices is less than half of that by banks at Rs11,861 crore. Many investors have even cleared their PPF accounts from post offices. Withdrawals from PPF accounts in post offices have exceeded the deposits by Rs95 crore. Banks, on the other hand, have a net collection of Rs23,000 crore from PPF accounts alone, said sources. 

Post offices are fast losing out in the recurring deposits too, which have been the department's flagship scheme. Out of Rs21,548 crore deposited in the scheme, Rs20436 crore have been withdrawn. 

Small savings schemes of the government are managed by the city-based National Savings Institute (NSI), and sold through banks as well as post offices. 

Sources say so far 6,000 post offices have implemented CBS, with a total target of 25,000. Rajashri Bhagat, president of All India Mahila Pradhan and Small Savings Agent, said frequent server breakdowns have left the agents harried. "The women agents have to wait till late in the evening due to the snags, making it inconvenient for them. Many are planning to even quit the job. This is also because the agents' commission has been done away with in schemes like PPF and senior citizen's deposits." 

Post offices are also insisting on opening savings accounts for liquidating PPF accounts, with the payments to be routed through the accounts. Many customers already have a bank account and are not keen on opening a fresh one, which is also discouraging them from continuing with post offices, said Bhagat. 

Banks, on the other hand, have faster services. Though selling PPF, senior citizens and Sukanya Samrudhi accounts, the banks could get better collections mainly because of internet connectivity. Funds can be transferred through net, which is not possible so far in post offices. 

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