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INDIAN POST OFFICE AND BANKING

1. Introduction

The Department of Post functioning under the brand name India Post , is a

government operated postal system in India; it is generally referred to within India


as "the post office". The Indian Postal Service, with 155,333 post offices, is the most widely distributed post office system in the world.. The large numbers are a result of a long tradition of many disparate postal systems which were unified in the Indian Union postIndependence. Owing to this far-flung reach and its presence in remote areas, the Indian postal service is also involved in other services such as small savings banking and financial services.

INDIAN POST OFFICE AND BANKING

History of Mumbai GPO (Bombay GPO)

The origin of the vast network of the Imperial Indian Post Offices can be traced to the opening of the General Post Offices at Calcutta and Madras but in respect of Mumbai GPO, sketchy information is traceable, scattered in the Mumbai Gazettes, Gazetteers and other official records in the Presidency. The first reference is found in the instructions issued in their letter book by the Company to the Council on 27th August 1688 to erect a post office for all letters to be brought to and delivered at Mumbai and the the land daks and passage boat should be established to take such letters to Surat and Other places, and the post office should be first leased out to a discreet and powerful man who ought to pay the Company for the contract not less than E400 to E500 a year. The Presidency of Mumbai had to wait for a century to witness the appointment of a Postmaster at Mumbai for the purpose of organizing a regular postal communication with the Fort Saint George GPO Madras for receipt and dispatches from the company. The exact date of establishment of Mumbai GPO is not known to the postal historians.

In the month of November 1787 a Postmaster was presumably appointed at Mumbai GPO for the first time in the history of Mumbai Presidency for receipt and dispatch of a fortnightly mail between Mumbai and Madras, In 1789 and Calcutta via Masulipatnam and Poona in the month of September of the year, The Postmaster General functioned for the whole of Presidency with the upgradation of the post office into a General Post Office in the year 1793. The Government opened a regular monthly Mail Communication service with Great Britain via Bussora for dispatch on the first of each month from 1st January 1798, four years after the first sea mail was introduced from the Mumbai GPO. The Mumbai GPO established its position with other Presidencies in the network of overland and inland postal communication lines within
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and outside British India, by opening runner lines to Surat, Delhi, Madras, Banglore, Calcutta, between 1796 and 1820.

The GPO was first located in the Saint George Fort for the convenience of the East India Company. Afterwards with the increase of private correspondence it was shifted to the premises of the then Mumbai Bunder near Appollo Pier. On 18th October 1831 the GPO was shifted to the premises opposite the head of Firbes Street. Again the GPO establishment was removed to the new Post office building, adjoining the Custom House vide Notice issued by John Gordon, PMG Mumbai, on 28th February 1844. The Mumbai Gazeetted of 27th October 1862 intimated that the GPO was shifted to the premises of Mumbai Fort near Appollo Street in 1860. The Director General recorded in his Report of 1868 69 that the GPO Building was burnt down by a fire on 1st March 1869 and the records were completely destroyed. In 1869 the GPO was shifted to CTO premises near Flora Fountain.

INDIAN POST OFFICE AND BANKING

The present GPO building just outside the CST Railway station earlier known as VT Railway station was designed in 1902 by John Begg, consulting architect to the Government. The stone fronted edifice was taken up for construction on 1st September 1904 and completed in April 1913. It is first building in India in Indo-Saracenic style of architecture. Total cost of construction was 1809000. Total area covered is 120000 sq.ft. with end to end length of 523 ft. The Office of the PMG was also located in this building. The chief feature of the building is the central hall that rises throughout the height (120 ft.) of the building to the great dome surrounding the structure. Its dome has a distinctive resemblance to the Gol Gumbaz of Bijapu. While the new dome of the building has a diameter of 65 feet, it is the largest dome of the City. Turrets and minarets resemble Moghul architecture. The style is in Indo-Saracenic style drawing inspiration from the Indian Monuments of Moghul period. Materials used are local basalt with dressing of yellow stones from Kurla and white stones from Drangdra. This building with the imposing dome and architectural design is one of the landmarks of the Fort area of Mumbai. In terms of utility, the building stands as a tribute to its planners and architects that the building is serving the staff and the public, without causing any cramp in the space available for use even today. The Department is earnest in conserving the building in its original form, in keeping with the heritage status. INTACH (Indian National Trust for Art, Culture & History) was engaged as consultant to advise the department on restoration and maintenance of this monument building. Mumbai GPO is now the biggest Post Office in the country and one of the biggest in the world. It caters to over 50,000 address sites, most of which are recipients of voluminous mail. The Business Hall of the GPO is unique with 101 counter positions, following the addition of the 1200 square meter large Bi-Centenary Hall, and working from 08.00 hrs. to 23.00 hrs where all businesses of a post Office are transacted for about more than

INDIAN POST OFFICE AND BANKING

25,000 people every day. Mumbai GPO is now totally computerized which facilitates its valued customer reliable and prompt service.

Mumbai GPO combines the glory of a historical tradition and the virtue of modern technology and is part of the life-line of the city. It is serving the vast majority of customer.

INDIAN POST OFFICE AND BANKING

HISTORY
The Indian postal system in the 14th century: In India the postal system was of two kinds. The horse post, called uluq, was run by royal horses stationed at a distance of every four miles. The foot-post has three stations per mile; it was called dawa, that is one-third of a mile ... was, at every third of a mile there is a well populated village, outside which are three pavilions in which sit men with girded loins ready to start. Each of them carries a rod, two cubits in length, with copper bells at the top. When the courier starts from the city he holds the letter in one hand and the rod with its bells on the other; and he runs as fast as he can. When the men in the pavilion hear the ringing of the bell they get ready. As soon as the courier reaches them, one of them takes the letter from his hand and runs at top speed shaking the rod all the while until he reaches the next dawa. And the same process continues till the letter reaches its destination. This footpost was quicker than the horse-post; and often it is used to transport the The British East India Company established post offices in Mumbai, Chennai and Kolkata from 1764-1766, each serving the Bombay, Madras and Calcutta presidencies. During Warren Hastings' governorship, postal service was made available to the general public. A letter would cost 2 annas (one-eighth of a Rupee) for distances up to 100 miles (160 km). Payments would be done through copper tokens; a letter was hand stamped "post paid" if paid for, otherwise it was stamped "post unpaid" or "bearing". In 1839, North West Province Circle was formed and since then, new Postal Circles were formed as needed. In December 1860 Punjab Circle, in 1861 Burma Circle, in 1866 Central Province Circle and in 1869 Sind Circle was formed. By 1880 circles had been formed in Oudh (1870), Rajputana (1871), Assam (1873), Bihar (1877), Eastern Bengal (1878) and Central India (1879).

INDIAN POST OFFICE AND BANKING

Afterwards, the creation of new circles was accompanied by the merging of some circles. By 1914, there were only 7 Postal Circles Bengal & Assam, Bihar & Orissa, Bombay (including Sind), Burma, Central, Madras, Punjab & NWF and U.P.

The first stamp of independent India shows the new Indian Flag. It was meant for foreign correspondence. August 15, 1947

The usage of the stamps began on 1 July 1852 in Scinde/Sindh district, with the use of an embossed pattern on paper or wax. The shape was circular, with "SCINDE DISTRICT DAWK" around the rim, leading to the common name "Scinde Dawk". 1854 was the year of the first issue for all of India. The stamps were issued by the British East India Company, which first printed a 1/2a vermilion in April but never sold it to the public, then put four values (1/2a, 1a, 2a, 4a) on sale in October. All were designed and printed in Calcutta, featuring the usual profile of Queen Victoria. A new set of stamps, with the queen in an oval vignette inside a rectangular frame, and inscribed "EAST INDIA POSTAGE", was printed by De La Rue in England (who produced all the subsequent issues of British India) and made available in 1855. These continued in use until after the British government took over administration of India in 1858, and from 1865 were printed on paper watermarked with an elephant head.
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MISSION
To provide high quality mail, parcel and related services in India and throughout the world ; to be recognized as an efficient and excellent organization exceeding the expectations of the customers, employees and the society; to perform the task by:

Total dedication to understanding and fulfilling customer's needs. Total devotion to providing efficient and reliable services, which customers

consider to be value for money.

Total

commitment to providing challenging and rewarding career for every

employee.

Total recognition of the responsibilities as a part of the social, industrial and commercial life of the country.Total enthusiasm to be forward looking and innovative in all areas.

INDIAN POST OFFICE AND BANKING

INDIAN POST PAYMENT NETWORK (IPPN)


India Post should aim to create the countrys first largescale small value payments Network the India Post Payments Network (IPPN) that is capable of electronic Transfers of Rs.100 at a charge of less than Re.1. The need for such a network, and an Overview of its Design is put forth in the Ouidas vision document From Exclusion to Inclusion withMicro payments as well as in the InterMinisterial Groups Report on Framework for Delivery of Basic Financial Services using Mobile Phones. Both Reports call for a tight integration between bank accounts and payments linked through mobile phones. Thus a POSB account should be tightly integrated with the MO. A Customer must be able send and receive payments into their accounts, or as cash,Through all channels the post office, the postman on the beat, mobile phone, internet, Or a franchised location. One important distinction between payments and other financial services Is that they are fundamentally different businesses. They equire different kinds of business Planning and ocus. Most financial products are about finical intermediation. Financial termediaries bring together lenders and borrowers g a variety of financialInstruments that match the consumption and savings needs of both classes of agents. The organization needs proficiency in financialTools such as building credit models, actuarial models, building networks of customers andClients, risk management models, etc. Payments systems are fundamentally about building Efficient IT systems, building a platform, operating retail networks, and making sure that All service providers gain a little something on each transaction. Thus, IPPN will require Team that is tuned to the requirements of building a payments system rather than one that is focused on delivering financial products.
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This retail like Nature of a payments system means that high volumes and ubiquity are Necessary for success. All possible markets must thus be tapped to build volumes. The Possibilities include but are not restricted to the following channels: 1. Person-to-person Payments 2. Government benefits payments 3. Microfinance, microinsurance, Micropensions 4. Mobile prepaid to pups 5. Recurring bill payments 6. Railway tickets 7. Other merchant transactions Of the channels above, India Post should play an active role in the creation of the Electronic MO linked to lightweight POSB accounts. This will enable persontoperson Payments, and G2P payments. For all other channels, India Post should nurture the Creation of an ecosystem, where other public and private enterprises integrate the India Post Payments Network (IPPN) into their own businesses, along with creating innovative Payments products. The Expert Committee recommends that India Post establish a mechanism through which The post offices can be harnessed into delivering short duration,
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Fixed size, Noncollateralised Micro loans (of Rs.500 for one month) while adhering to the following

Principles:
1) India Post must not undertake credit risk using public funds, 2) India Post should serve as a facilitator for a mass-market For micro loans Without Running the market. 3) India Post must not displace private investment, 4) Vendor neutrality and transparency must be maintained in selecting eligible credit Providers and India Post should not perform any activities that may damage its reputation.

Connectivity
While expanding the Postal network, the policy of India Post is not only to provide physical access to the people, but also to bridge the digital divide. As a step in this direction, India Post has a Technology Induction Plan, which would connect the entire population to the electronic network. India Post will induct technology aimed at providing new and better services, and more efficient management by computerizing and networking all post offices using Central Server based system. Induction of other state of the art processing systems including mail-processing systems - so as to provide service on par with global industry standards - will facilitate financial transactions such as inward domestic and foreign remittances to and from India Posts customers.

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2.GOVERNANCE AND ORGANISTAION


The postal service comes under the Department of Posts which is a part of the Ministry of Communications and Information Technology under the Government of India. The apex body of the department is the Postal Service Board. The board consists of a chairman and three members. The three members hold the portfolios of Operations & Marketing, Infrastructure & Financial Services, and Personnel. The Joint Secretary and Financial Advisor to the Board is also a permanent invitee to the Board. India has been divided into 22 postal circles. Each circle is headed by a Chief Postmaster General. Each Circle is further divided into Regions comprising field units, called Divisions, headed by a Postmaster General. Other functional units like Circle Stamp Depots, Postal Stores Depots and Mail Motor Service may exist in the Circles and Regions. Besides the 22 circles, there is a special Circle called the Base Circle to cater to the postal services of the Armed Forces of India. The Base Circle is headed by an Additional Director General, Army Postal Service holding the rank of a Major General.

Governance Structure
The Department of Posts is part of the Ministry of Communications and Information Technology, Government of India. The Secretary, Department of Posts, as the Chief Executive of the Department, is also the Chairperson of the Postal Services Board and Director General, India Post. There is a need to revisit India Posts governance structure to provide an effective line of command so that India Post is able to meet the challenges of current market conditions vis--vis other players in the postal sector. India Post recognizes the presence of private competitors in the market, but there is also a need
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for regulating the sector to ensure disciplined functioning and growth. India Post expects in the near term to achieve self-sufficiency given realistic prices for its core functions and other services. However, for the purpose of operational efficiency and expansion of its activities, funding of its capital requirement may require external resources. It also expects to receive revenues from its financial services and other fee based services. It will examine closely and rationalize its product mix with emphasis on e-commerce, logistics and parcel services, etc., bearing in mind the need to maintain highest level of performance in letter mail services, financial services and governance functions.

India Post is an essential part of the governance of the country. It has performed sovereign functions since its inception and is instrumental in unifying the country and ensuring connectivity between far-flung regions and between dispersed citizens, both within and outside the country. Its presence and operations have ensured that as a Government organization it enjoys high credibility and trust, and citizens have no hesitation in approaching its personnel or visiting its offices. This degree of confidence is precious and it can be leveraged to bring more accuracy, efficiency and credibility to other governance functions that depend crucially on identification of individual citizens. It is therefore, possible, given government approval and legislative support, for India Post to carry out maintenance of electoral rolls, census operations and ensure passport verification etc. This will be based on a National Address Database Management System (with street and GPS addresses), which will be established. It will also solve the identification problem that besets most Governmental programs and policies. Investment in this facility will enable the Union and state governments to allow citizens
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to avail of their rights as well as enable the Government to identify and locate citizens more accurately.

Private Sector Participation


India Post welcomes the opportunity to work with the private sector in providing value added services and extending its product range beyond the current core functions. Private sectors participation in providing support services is expected to enable India Post to serve its customers better.

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Physical Infrastructure
It will be the policy of India Post to bring its facilities within reach of every citizen in the country. Since Independence, India Post increased the number of post offices from 23,344 to 1,55,204. It is the largest postal network in the world, with one post office serving 7160 people and covering an area of approximately 21.2 sq. kms. Despite this only 1,37,508 out of 5,95,113 inhabited villages have post offices. Even if only Gram Panchayat villages are considered, only 1,15,881 of them out of a total of 2,34,755 have post offices. With the 73rd Constitutional Amendment transferring funds, function and functionaries in many development sectors to Panchayati Raj Institutions (PRIs), there is a real need to increase connectivity and provide communication and financial services to these bodies to enable them to discharge their Constitutional roles. There is a need therefore, to expand, strengthen and rationalize the rural branch network to ensure full coverage. This can be done with funding assistance from the Government for infrastructure support. India Post not only needs to invest in physical structures and remedial maintenance, but also in good housekeeping, computerization, transport facilities etc. This will result in increased efficiency, lower costs, customer satisfaction and enhanced service delivery.

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3. NATIONAL POSTAL POLICY

Introduction
An efficient and reliable communication network is the lifeline of the nation and plays a crucial role in socio-economic development and the integration of the country. For nearly a century and half the Postal System has been the main component of the communication infrastructure for the country. The Indian economy has moved on to a high economic growth trajectory involving an average annual growth rate of about 6% over the last 16 years with further acceleration in recent years. India Post requires a new policy framework because of the emergence of several significant trends such as: liberalization and globalization; demographic shift towards urbanization leading to increasing internal and external migration requiring to be serviced; monetization of the economy especially the agricultural sector giving rise to a corresponding demand for financial services by all sections of the population; and government policy to increase funding for weaker section programs. Given the need for a strong communication and financial infrastructure, India Post will meet both challenges and avail of the opportunities presented by current market conditions. A Policy for India Post This policy has a two-pronged approach. Develop services that assist, facilitate, enhance and quicken the process of development aimed at inclusive growth.

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Reposition India Post to become a self-sufficient, credible, efficient, quick and costeffective provider of these services.

Function:India Posts mandate, traditionally, has covered the following services: Delivery of letter and other mail Savings Bank operations Money transfer Provision of Life Insurance

1) Transmission and delivery of mail can be defined as India Posts core business so far. Post Office Savings Bank is the oldest and largest banking institution in the country. Transmission of funds by postal order/money order has been the traditional way of money transfer. Since 1884 onwards Postal Life Insurance (PLI) has been providing life insurance coverage, initially to employees of P&T Department and subsequently to all Government employees. Since 1995 PLI has been extended to the rural population of the country under a new scheme Rural Postal Life Insurance. 2) India Post is expected to ensure provision of quality and basic postal services on regular basis to all the users at all points in the country at affordable prices as part of its Universal Service Obligation. The cost of providing these services has
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to be assessed systematically and fully funded. The source of funding needs to be determined and set in ways that ensure the financial self-sufficiency of India Post and allow it to make decisions relating to growth and development. A sustainable tariff policy for providing the basic postal services also has to be determined. In view of the increasing participation in mail services by private players there is a need to address the issue in a holistic manner. 3) To effectively face the challenges of competition India Post also needs to be able to respond to market forces quickly and efficiently both in pricing and product decisions. In order to do so, India Post will require a certain degree of financial autonomy and commercial flexibility while remaining accountable to its customers and to Parliament.

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4. Human Resource Development


The basis of any policy of sustainability and growth, especially of labor intensive activities, is the productivity, capacity and morale of its personnel. A greater focus on human resource development will be given with the objective of enhancing and transforming the human resource of India Post into a customer-friendly, techno-savvy and efficient workforce led by managers attuned to their tasks and aware of the competitive and accountable environment. Efforts will also be made to increase productivity of human resources through direct recruitment of technically qualified persons, training of incumbents and various incentive schemes. Increased productivity and higher performance will receive appropriate incentives and the interests of the workforce will be safeguarded. India Post will equip its workforce to achieve the standards of excellence expected by its customers. Ms. Radhika Doraiswamy Secretary Director General (Posts) Chairman, Postal Board

K Gopinath Member (Personnel) Postal Services Board S. Samant Member (Technology)

Ms. Manjula Prasher Member (Operations) Postal Services Board Dr. Uday Balakrishna

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Postal Services Board

Member (PLI) & Chairman Investment Board Postal Services Board

Maj. Gen. V Sadasivam Member Postal Services Board

Ms. Indira Krishna Kumar (HRD) Member (Planning) Postal Services Board

The Department of Posts comes under the Ministry of

Communications and

Information Technology , Government of India, functions under the Minister for Communications for and Information Technology , and has to assist the Minister a Minister of State

Communications

of Communications and Secretary, also the

Information Technology in the discharge of Department of Posts,

various functions. The Department, is

as the Chief Executive of the

Director General, India Post , and the Chairman of the Postal Services Board. The Postal Services Board, the apex management body of the Department, comprises the Chairman and six Members. The Members of the Board hold portfolios of Personnel, Operations, Technology, Postal Life Insurance, Human Resources Development, and Planning. The Joint Secretary and Financial Advisor to the Department is a permanent invitee to the Board. The Board is assisted by a

senior staff officer of the Directorate as Secretary to the Board. Presently, Senior Deputy Director General (CP) is assisting the Board in this capacity.
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Deputy

INDIAN POST OFFICE AND BANKING

Directors General, Directors support for the the Board at

and

Assistant Directors General provide necessary Postal Services Directorate is

Headquarters. The

Headquarters organisation located at Dak Bhawan , New Delhi , to oversee the

operations in the provision of postal services throughout the country. For providing postal services, the whole country has been divided into 22 Postal

Circles. These Circles manage the day-to-day functioning of the various Head
Post offices.

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5. POSTAL SERVICE

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1 International Registered Post


To provide secure transmission of customers articles. A record is kept at all stages the article passes through. Also the registered articles are transmitted , under special precautions.

2 Speed Post

The very high speed expresses service for letters and documents. Speed Post links more than 1200 towns in India, with 290 Speed Post Centers in the national network and around 1000 Speed Post Centers in the state network. For regular users, Speed Post provides delivery anywhere in India under contractual service. Speed Post offers
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a money-back guarantee, under which the Speed Post fee will be refunded if the consignment is not delivered within the published delivery norms.

3 E Payment
The most convenient way to pay your bills under one roof. With its tremendous reach and expertise India Post specializes in acceptance of payments across the counter and their consolidation. E-Payment is a Many to One service through which bills (telephone, electricity, etc.) paid by customers in post offices is electronically consolidated.

4 Logistics Post
A brand new service from India Post great for sending parcels and large consignments across the nation and around the world. Logistics Post manages the entire distribution side of the logistics infrastructure from collection to distribution, from storage to carriage, from order preparation to order fulfillment. Logistics Post is an ideal service for sending large consignments including multi-parcels, just-in-time parcels, bulk-break

consignments and goods of any weight. While Parcel Post offers weight up to 35 kg, Logistics Post has no weight limit. Logistics Post offers not only physical logistics services but also provides comprehensive supply chain management services, leading to improvement in the service level efficiency. Where is the details rate?

5 Business Post
Total pre-mailing solutions including collection/printing, inserting, and addressing.

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6 Media Post
Advertisements sent by media companies on Post cards, letters, walls of post offices, letter boxes, stationary etc and received by millions of peoples.

7 Direct Post
Distribution of advertising materials directly to prospective customer

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6. FINANCIAL SERVICES
The Post Office Savings Bank Scheme is an agency function performed by India Post on behalf of the Ministry of Finance, Government of India. The Ministry of Finance remunerates India Post for this agency work at a rate fixed from time-to-time.Nearly 16 core* people use India Post to save Rs. 3,23,781 crore as on March 31, 2007. Out of this, deposits in savings bank account alone is Rs.16,789 crore. There is, therefore, a need for India Post to computerize and connect all its savings bank accounts so as to widen and deepen the level of financial transactions and offer banking services to the rural population. India Post sees a great opportunity for increasing the number of accounts and volume of savings. India Post will provide banking and financial transaction services to cater to the needs of the rural population and help realize the policy of financial inclusion for the unbanked rural masses. For deepening and broadening its financial services, suitable agreements with public/private sector banks will be forged, so that India Post can offer its unique last mile connectivity to the customers. This will permit it to receive fees for the service rendered to the banks and other financial entities. Before this, however, adequate infrastructure and connectivity coupled with application of appropriate software needs to be in place. India Post will also be the predominant agency for payments under all social security schemes of Government such as Old Age Pension scheme, Rural Health Insurance, National Rural Employment Guarantee Scheme etc. Such a service will reduce delay and inefficiencies in making payments of legitimate entitlements to the poor, illiterate and uneducated masses that are more likely to have confidence in the Post Office, than any other agency.

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The urbanization of the country to levels of over 50% of population in older urban agglomerations, new growth sectors and new agglomerations, creation of special economic zones etc., has created additional demand for postal and financial facilities. These urban postal and financial services are essential in order to maintain the flow of funds between urban and rural residents and it is necessary to ensure safe and quick transmission of monies. Since the competitors for such urban services are aggressive and efficient private players, India Post will enhance and improve its delivery of urban services in order to offer comparative standards of performance. India Post will increase its market share in rural insurance. Postal Life Insurance and Rural Postal Life Insurance are the instruments, which will allow India Post to increase its market and business potential, as also fulfilling the social obligation of insuring people. It will transform the century old Postal Life Insurance into a commercial business entity making its own investment decisions and (1 crore = 10 million) Competing on level playing field with other insurance entities, while conforming to requirements of IRDA norms.

Non-postal services
The post office has also traditionally served as a financial institution for millions of people in rural India. Currently these are some of the activities being supported:

Public Provident Fund National Savings Certificate Kisan Vikas Patra Savings Bank Account

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Monthly Income Scheme Recurring Deposit Account National Savings Scheme 1992 - discontinued from 01.11.2002 Post Office Time Deposit Post boxes for mail receipt

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FINANCIAL SERVICES

Core banking services

Banking

Postal life insurance

Financial service
e-imo
Money order

Electronic clearance service

International money transfer

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1 CBS -Core banking services


India Post provides accessible and affordable service to the people of India

through its unparalleled network of post offices. Mails, Savings, Insurance and Parcel are the mainstay of post offices with several new services like Western Union money transfer, Electronic Money Order and distribution of mutual funds added successfully in the last decade. Due to its competitive advantage of geographical accessibility and its time tested accounting procedures, India post has also positioned itself as a reliable agency for the Government of India (GOI) in implementing its inclusive growth policies. Not only does the post office disburse MGNREGS wage and old age pension payments but also in the process has opened savings accounts to a large number of financially excluded people, thereby enabling GOI to achieve its twin objectives. To improve its service quality and operational efficiency, India post has embarked on an IT modernization programmed. One of the key components of this IT modernization programmed is to introduce a centralized core banking solution with alternate delivery channels facilitating any time any where banking environment. This core banking environment will enable faster transfer of funds and easier withdrawals eventually being inclusive by bridging the digital divide. The alternate delivery channels proposed for service delivery are ATMs, Internet, Phone and Mobile Banking. This is an Eleventh Five Year Plan Project and envisages implementation of CBS in 4000 post offices during the plan period.

2 Postal Life Insurance


Postal Life Insurance was started in 1884 as a welfare measure for the employees of Posts & Telegraphs Department under Government of India dispatch No. 299 dated 1810-1882 to the Secretary of State. Due to popularity of its schemes, various
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departments of Central and State Governments were extended its benefits. Now Postal Life Insurance is open for employees of all Central and State Government Departments, Nationalized Banks, Public Sector Undertakings, Financial Institutions, Local Bodies like Municipalities and Zila Parisads, Educational Institutions aided by the Government etc. A Rural Postal Life Insurance On 24th March, 1995, the benefits of Postal Life Insurance were extended to rural pop2ne scan karvaya kya????ulace of the country under the banner of Rural Postal Life Insurance.

B Postal Life Insurance Schemes


SANTHOSH (ENDOWMENT ASSURANCE) SURAKSHA (WHOLE LIFE ASSURANCE) SUVIDHA (CONVERTIBLE WHOLE LIFE ASSURANCE ) SUMANGAL (ANTICIPATED ENDOWMENT ASSURANCE) YUGAL SURAKSHA ( JOINT LIFE ENDOWMENT ASSURANCE ) CHILDREN POLICY

C Rural Postal Life Insurance Schemes


GRAM SANTOSH (ENDOWMENT ASSURANCE) GRAM SURAKSHA (WHOLE LIFE ASSURANCE) GRAM SUVIDHA (CONVERTIBLE WHOLE LIFE ASSURANCE) GRAM SUMANGAL (ANTICIPATED ENDOWMENT ASSURANCE) GRAM PRIYA (10 YEARS RPLI) CHILDREN POLICY
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3 Money Order
A money order is an order issued by the Post Office for the payment of a sum of money to the person whose name the money order is sent through the agency of the Post Office. A Payee is the person named in money order as the person to whom the money is to be paid. The advantage of sending money to someone through money order is that the money is delivered at the house or his place of stay.

Procedure of sending the Money order.

Buy a money order form at the counter of the post office. A remitter is the person who send money order

Fill in ink the necessary entries adding his signature of thumbs marks at the foot. A form without signature or thumb mark or incomplete in any respect will not be accepted. All entries made in the form must be legible and may be written in English, Hindi to in the language of the district either by the remitter himself of by any one on his behalf. The remitter may write on the coupon any communication he desires to make to the payee.

The amount for which a single money order may be issued must not exceed Rs 5000/-

The money order form duly filed in, together with the amount of the money order and commissions either in cash or by Cheque is presented at the post office counter.

A receipt will be given for the amount paid by him on account of the money order and commission. Any error or omission in the receipt should be pointed out at once by the remitter; otherwise the Post Office will not be responsible.
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After the money is paid to the payee the remitter of money order receives an

Acknowledgement of payment of the amount of the money order signed by the payee or his authorized agent. If the acknowledgment is not received in a reasonable time, a certificate of payment signed by the Postmaster of the office will be given on application. However, in the case of money orders issued in favor of Government or District, Local or Municipal Boards, the acknowledgment in some cases is retained by the payee who issued a departmental receipt to the remitter direct.

Alteration in address or place of payment:The remitter of a money order which has not been paid may require that the address of the payee shall be altered or that the name of post office at which the order was originally made payable, shall be changed. The required change will be made without additional charge on the remitter applying in writing to the Post Office at which the order was issued and producing the receipt and giving full particulars of the payees address as entered in the money order.

Alteration of payees name:The remitter of a money order which has not been paid may require that the amount be paid to some person other than the payee named in the order. The required change will be made, on payment of a second commission equal to the first, on the remitter applying in writing to the post office at which the order was issued and producing the receipt and giving full particulars of the payees address as entered in the money order.

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Stoppage of payment: The remitter of a money order which has not been paid may stop payment and requires that the money be repaid to him. This will be done without additional charge on the remitter applying in writing to the post office at which the money order was issued and producing the receipt and giving full particulars of the payees address as entered in the money order. Payment can be stopped by telegram if the remitter pays the telegram charges. In no case however will the Post Office be responsible for inability or failure to stop payment of a money order in compliance with the remitters request. A money order is an order issued by the Post Office for the payment of a sum of money to the person whose name the money order is sent through the agency of the Post Office. A Payee is the person named in money order as the person to whom the money is to be paid. The advantage of sending money to someone through money order is that the money is delivered at the house or his place of stay. 4) International Money Transfer:- As a result of the collaboration of the Department of Posts with the Western Union Financial Services, state of the art international money transfer service is now available through post offices in India. This enables instantaneous remittance of money from 185 countries to India. The recipients can in fact collect the money in minutes after the sender has made the remittance. The service is targeted to particularly fulfils the needs of NRI dependent families in India, visiting International tourists and foreign students studying in India.

The International Money Transfer process is as follows: 1. To avail of this Service, a remitter goes to any one of the more than 100,000

Western Union Locations in the 185 countries in which the Service operates , fills up a "To send money" form and pays principal amount and charges. The sender gets a Money Transfer Control Number on a
34

receipt

after the transaction is

sent through the system.

Thereafter, the sender calls up his/her payee and gives

INDIAN POST OFFICE AND BANKING

information on the money sent. The Payee / Receiver goes to the post office, fills up a "To receive money" form shows valid identification and receives money along with the receipt, once the transaction is verified. This entire process is completed within ten minutes. 2. The Payee receives the full amount in Indian Rupees. There is not more than

2500 USD can be sent at a time as per applicable RBI regulations which must however be only for personal use... 3. The Post offices have been directed to treat the payee as "Most

Favored Customers", which ensures courteous and efficient service to them. 4. For the sake of facilitating the transactions, the recipients can use any one of the

following documents to establish their identity: a) Voter Card 5. The Post b) Passport c) Driving License d) Income Tax PAN Card

office also provides its

own identity card to regular customers so that

other proof of identity does not have to be provided by them again. 6. The service is currently available in all the State/Union Territory capitals and

other major cities in the country and by the end of March , it is proposed to be expanded to Head Post offices at the district headquarters. 7. This International Money Transfer Service is safe, legal, fast & reliable. Also, it India and is being provided by a

is approved by the Reserve Bank of Department of the Government of India 9.

i.e. the Department of Post.

At present the Post office will only provide its customers with the facility of

receiving money and not of sending money from India to other countries, as per applicable RBI instructions.
35

INDIAN POST OFFICE AND BANKING

10.

On the request of the NRI community , the department is open to extending

the services to any other location (village/town/city) as well, which has the potential clientele. 11. For further information on the service, the International representatives of the

Western Union Financial Services International can be contacted in any of the 185 countries from which the service is available. 12. Requests for extension of the service to any part ; town / village / city in

India along with any other feedback by Indian missions as well as NRI bodies can be provided directly to Project Services Manager, International Money Transfer

5 Electronic Clearance Service (ECS)


The ECS scheme provides an alternative method of effecting bulk payment transactions like periodic (monthly/ quarterly/ half-yearly/ yearly) payments of interest/ salary/ pension/ commission/ dividend/ refund by Banks/Companies /Corporations

/Government Departments. The transactions under this scheme move from a single User source (i.e. Banks/Companies /Corporations /Government Departments) to a large number of Destination Account Holders (Customers/Investors). This scheme obviates the need for issuing and handling paper instruments and thereby facilitates improved customer service by the Banks and Companies/Corporations/Government Departments effecting bulk payments.

36

INDIAN POST OFFICE AND BANKING

The Scheme is in operation at 15 centers where Reserve Bank of India manages Clearing Houses, 21 centers where SBI is managing ECS on behalf of RBI and 29 other centers where PNB and other banks are managing ECS on behalf of RBI. The ECS is being offered in the Department of Posts in connection with payment of monthly interest under Monthly Income Scheme (MIS). The Department of Posts introduced ECS scheme on a pilot basis in Mumbai City on 9th August 2003. Under ECS, the depositors have the facility of getting MIS interest automatically transferred and credited into their SB account on the due dates at the designated Bank of their choice. Currently, the service is available in the Department of Posts at 15 RBI locations and 19 SBI locations as given below. In remaining 2 SBI locations viz. Raipur (Chhattisgarh) and Ranchi (Jharkhand) the ECS will be introduced shortly.

6 Instant Money Order Service (imo)


The instant domestic money is available in 717 post offices. However no International Money Order facility is available. INSTANT SAFE RELIABLE CONVENIENT Up to INR 50,000/-

India Post presents Instant Money Order (iMO), the instant on-line money transfer service that is instant, convenient, reliable and affordable. IMO is an instant web based money transfer service through Post Offices (iMO Centre) in India between two resident individuals in Indian territory.

You can transfer money from INR 1,000/- to INR 50,000/- from designated iMO Post Offices.

It is simple to send and receive money.


37

INDIAN POST OFFICE AND BANKING

IMO Booking Procedure

Fill up the To Remit Payment (TRP-1) form and submit it with money at iMO Post Office Counter.

iMO Counter clerk after booking the iMO immediately will give a printed receipt with computer generated confidential 16 digit iMO number in a sealed condition. Even the 16 digit iMO number will not be known to booking clerk. Customer is required to tear off the seal and convey the confidential 16 digit iMO number to the receiver over phone, SMS, e-mail, etc. at his means and risk.

iMO delivery Procedure


Receiver to present the 16 digit iMO number at any designated iMO post office counter and will fill up and submit a To Make Payment (TMP -1) form along with a copy of his personal identity proof Receiver can receive the payment in cash up to INR 50,000. He can also receive the payment through his post office savings bank account in the same iMO office.

38

INDIAN POST OFFICE AND BANKING

Tariff Commission Remittance INR 1000-5000 5001-10000 10001-15000 15001-20000 20001-25000 25001-30000 30001-35000 35001-40000 40001-45000 45001-50000 150 170 190 210 230 250 270 290 310 330

39

INDIAN POST OFFICE AND BANKING

Photo Identity
1. Voters I-Card 2. PAN Card 3. Ration Card with photo of the receiver 4. Post Office Identity Card 5. Driving License 6. Passport. 7. School/college Id 8. Official Id

Non-postal services
The post office has also traditionally served as a financial institution for millions of people in rural India. Currently these are some of the activities being supported:

Public Provident Fund National Savings Certificate Kisan Vikas Patra Savings Bank Account
40

INDIAN POST OFFICE AND BANKING

Monthly Income Scheme Recurring Deposit Account National Savings Scheme 1992 - discontinued from 01.11.2002 Post Office Time Deposit Post boxes for mail receipt

41

INDIAN POST OFFICE AND BANKING

7. SAVINGS BANK Post Office Savings Bank - The safest investment Save today-Smile tomorrow
1) Monthly Income Scheme (MIS) 2) Recurring Deposit 3) Time Deposits 4) Senior Citizen Savings Scheme (SCSS) 5) Public Provident Fund 6) Kisan Vikas Patras 7) National Savings Certificates (NSC) 8) Savings Schemes Chart 9) FAQ on Banking

42

INDIAN POST OFFICE AND BANKING

Savings Account
1. Any individual can open an account 2. Cheque facility available. 3. Group Account, Institutional Account, other Accounts like Security Deposit account & Official Capacity account are not permissible 4.Rate of interest 3.5% per annum

Type Account

of Maximum Limit

Single Account

INR. 1 lakh

Joint Account

INR. 2 lakh

43

INDIAN POST OFFICE AND BANKING

1 Monthly Income Scheme (MIS)


a) Safe & sure way to get a regular monthly income. b) Specially suited for retired employees/ Senior Citizens or any one with high sum for investment . c) Rate of interest 8%. d) Maturity Period - Six Years. 5% Bonus on Maturity. e) Post maturity Interest at the rate applicable from time to time (at present 3.5%) f) Auto credit facility to SB Account

Type of Account

Minimum limit

Maximum limit

Single

INR 1500/-

INR 4.5 lakhs

Joint

INR 1500/-

INR 9 lakhs

Deposit in Monthly Income Scheme and invest interest in Recurring Deposit to get 10.5% (approx) interest. Above scheme operates automatically, if you open a saving
44

INDIAN POST OFFICE AND BANKING

bank account and give a request for automatic transfer of Monthly Income Scheme interest to Recurring Deposit through Saving Bank account

2 Recurring Deposit:a) Any individual (a single adult or two adults jointly) can open an account b) Four defaults are allowed. c) Defaults can be paid within two months. d) Part withdrawal facility available. e) Premature closure allowed after three years

Type of Account Individual Account

Minimum Deposit

Maximum Deposit

INR. 10/- and in multiples No limit. of INR. 5/- thereafter

3 Time Deposit:Type of Account Minimum Deposit Maximum Deposit

1,2,3 & 5 Year TD

INR.200/-

and

in No limit.

multiples of INR. 200/thereafter

45

INDIAN POST OFFICE AND BANKING

4 Senior Citizens Savings Scheme (SCSS) :a) A new avenue of investment and return for Senior Citizen. b) The account may be opened by an individual, c) Who has attained age of 60 years or above on the date of opening of the account? d) Who has attained the age 55 years or more but less than 60 years and has retired
under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account retirement. within three months from the date of

e) No age limit for the retired personnel of Defense services provided they fulfill other
specified conditions.

f) Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to
open an account

g) No withdrawal shall be permitted before the expiry of a period of five years from the
date of opening of the account. The depositor may extend the account for a further period of 3 years

h) After one year but before 2 years on deduction of 1 % of the deposit i) After 2 years but before date of maturity on deduction of 1% of the
deposit.

46

INDIAN POST OFFICE AND BANKING

j) In case of death of the depositor before maturity, the account shall be closed and
deposit refunded without any deduction along with interest. Interest @ 9% per annum from the date of deposit on quarterly basis.

5 15 Years Public Provident Fund:a.


Ideal investment option for both salaried as well as self employed classes.

b. c.

Non-Resident Indians (NRIs) not eligible.

Investment up to INR. 70,000 per annum qualified for IT Rebate under section 80 C of IT Act

d. e. f. g.

Loan facility available from 3rd financial year upto 5th financial year. Withdrawal permitted from 6th financial year.

Free from court attachment.

An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of peINRons.

Type Account

of

Minimum limit

Maximum limit

47

INDIAN POST OFFICE AND BANKING

Public Provident Fund


(Individual account on

INR. 500/- in a year financial

INR. 70,000/- in a financial year

his behalf or on behalf of minor of

whom he is the guardian

6 Kissan Vikas Patra


1) Investment doubles in 8 years 7 months. 2) Encashment at any time after expiry of 2 Years from the date of issue of certificate any Post Office. 3) NRIs & HUF not eligible. 4) Nomination facility is available. 5) Post maturity interest is also admissible at the rate applicable from time to time at present 3.5%

48

INDIAN POST OFFICE AND BANKING

7 National Savings Certificates (NSC)


Scheme specially designed for Government employees, Businessmen and other salaried classes who are IT assesses No maximum limit for investment. No tax deduction at source Certificates can be kept as collateral security to get loan from banks. Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of IT Act. Trust and HUF cannot invest.

49

INDIAN POST OFFICE AND BANKING

8.POST OFFICE SAVINGS SCHEMES

Sec 80C benefit: Investments up to INR 1 lakh in specified securities (maximum of INR 70,000 in PPF) qualify for deduction Compounded half-yearly Compounded yearly Compounded quarterly Payable quarterly

50

INDIAN POST OFFICE AND BANKING

SCHEME

Interest

Payable, Investment Limits Salient

features

Rates, Periodicity and etc. Denominations

including Tax Rebate

Post

Office 3.5% per annum Minimum INR 50/- Cheque on individual/ joint . accounts.

facility

Savings Account

Maximum INR available. Interest Tax

1,00,000/- for an Free individual account. INR 2,00,000/- for joint account.

5-YearPost Office On maturity INR Minimum INR 10/- One Recurring Deposit 10/Account fetches account per month or any 50% INR amount

withdrawal of the

upto

balance

in allowed after one year. maturity on value R.D.

728.90/-. Can be multiples of INR Full continued

for 5/-. No maximum allowed

another 5 years limit. on year to year basis. Rate 7.5% of interest (quarterly

Accounts restricted to that of INR. 50/-

denomination in case of death of depositor

subject to fulfillment of certain conditions. 6 & 12 months advance

compounded).

deposits earn rebate.

PostOffice

Time Interest annually

payable Minimum but 200/51

INR Account may be opened and in by individual. 2,3 & 5

INDIAN POST OFFICE AND BANKING

Deposit Account

calculated quarterly. Period 1 yr. A/c 2 yr. A/c 3 yr. A/c 5 yr. A/c Rate 8.20% 8.20% 8.30% 8.40%

multiple

thereof. year account can be

No maximum limit. closed after 1 year at discount. Account can also be closed after six months but before one year without interest.

The investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1.4.2007. 1961 from

15year Provident Account

Public 8%

per

annum Minimum 500/-

INR. Deposits

qualify

for

Fund (compounded yearly).

Maximum deduction from income

INR. 70,000/- in a under Sec. 80C of IT financial year. Act. Interest is

Deposits can be completely made in lump sum Withdrawal or in

tax-free. is

12 permissible every year from 7th financial year. Loan facility available from 3rd Financial year. No attachment under

installments.

court decree order.

PostOffice Monthly

8%

per

annum In multiples of INR Maturity Maximum years.

period Can

is

6 be

Income payable i.e. INR 1500/52

INDIAN POST OFFICE AND BANKING

Account

80/- will be paid INR 4.5 lakhs in prematurely every month on a single deposit 12000/-. of account after one

encashed year but

INR and INR 9 lakhs in before 3 years at the joint account. discount of 2% of the deposit and after 3

years at the discount of 1% of the deposit. means from the

(Discount deduction

deposit.) A bonus of 5% on principal amount is admissible on maturity in respect of MIS

accounts opened on or after 8.12.07.

KisanVikas Patra

Money doubles in No 8 years &

limit

on A single holder type certificate may be

7 investment.

months. for

Facility Available

in issued to an adult for

premature denominations of himself or on behalf of a INR. 100/-, INR. minor or to a minor, can 500/-, INR. 1000/-, also be purchased

encashment. Rate 8.4% (compounded yearly) of

interest INR. 5000/-, INR. jointly by two adults. 10,000/-, in all

Post Offices and INR. 50,000/- in all Head Post

53

INDIAN POST OFFICE AND BANKING

Offices.

National Certificate issue)

Savings 8%

Interest Minimum six 100/but maximum at available

INR. A single holder type No certificate can be

(VIII compounded monthly payable maturity. 100/grows

limit purchased by an adult in for himself or on behalf

INR. denominations of of a minor or to a minor. to INR. 100/-, 500/-, Deposits quality for tax

INR 160.10 after 6 1000/-, 5000/- & rebate under Sec. 80C years INR. 10,000/-. of IT Act. The interest accruing

annually but deemed to be reinvested will also qualify for deduction

under Section 80C of IT Act.

Senior

Citizens 9%

per

annum, There

shall

be Maturity

period

is

Savings Scheme

payable from the only one deposit years. A depositor may date of deposit of in the account in operate more than a 31st March/30th multiple INR.1000/of account in individual

Sept/31st

capacity or jointly with not spouse. Age should be

December in the maximum first instance

& exceeding rupees 60 years or more, and 55 years or more but less than 60 years who has
54

thereafter, interest fifteen lakh. shall be payable on 31st March,

retired

on

INDIAN POST OFFICE AND BANKING

30th June, 30th Sept and 31st

superannuation

or

otherwise on the date of opening of account

December.

subject to the condition that the account within of receipt is one of

opened month

retirement Premature

benefits. closure is

allowed after one year on deduction of 1.5% interest & after 2 years 1% interest. TDS is

deducted at source on interest if the interest amount is more than INR 10,000/- p.a. The investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

55

INDIAN POST OFFICE AND BANKING

9. MUTUAL FUNDS AND BUSINESS OJECTIVES

Mutual Funds

Distribution of Mutual Funds and Securities:


The Post Office has traditionally been a distributor of financial services, from money orders to banking services. The Post Office Savings Bank is the largest retail bank in the country, operating from over 1,50,000 branches. With an objective to leverage the Strength of the postal network and skills Department of Posts had started retailing mutual Funds and bonds. On 22nd January 2001, India Post in partnership with IDBI-Principal launched a scheme for distribution of mutual funds through post offices. A pilot project was started from the four cities of Delhi, Mumbai, Kolkata and Patna. Thereafter from 15th June 2001 onwards, the scheme was extended to cover post offices in all major capital and other cities all across the country. At present select schemes of Principal, SBI, UTI, Franklin Templeton and Reliance Mutual Fund are retailed through designated post offices in the country.
56

INDIAN POST OFFICE AND BANKING

Easy steps for investing through the Post Office:


1. At each designated post office one counter (AMFI qualified personnel) has been earmarked (usually on a non-exclusive basis) to receive the Mutual Fund applications; 2. An investor can approach the designated post office counters or the concerned postmaster for application forms and literature on the types of fund schemes available through the post office; 3. Thereafter he can hand the application forms duly filled along with requisite amount in the form of a demand draft/cheque to the counter staff. No cash will be accepted 4. The counters accept the application forms as per the cut off time prescribed by the AMCs for accepting the applications for their schemes in the particular post offi

Business objectives

Vision: A socially committed organization connecting individuals and businesses. Goal:


1. Post within easy reach of all by year 2013-14.

57

INDIAN POST OFFICE AND BANKING

2. To be a focal point for delivery of all social security schemes of the State by the year 2011-12. 3. To be a self-sustaining organization by the year 2013-14. 4. To increase financial inclusion of the unbaked population by at least 10% By the year 2013-14.

Objectives:
1. To provide basic postal facilities, i.e., collection and delivery of mails, within easy reach (1.5 kms) of all people and businesses. This is to be achieved through opening of more post offices, relocation of existing post offices, giving out franchisees to individuals, shops, institutions, self-help groups, etc. By March 2012, 3000 post offices and 10,000 franchisee outlets are proposed to be opened. 2. To : (i) seek out aggressively MOU with State / Central Governments for delivery of all social security schemes through post office by the year 2010- 11; (ii) Computerize and network all post offices by the year 2011-12 so that information regarding delivery of social security schemes can flow on real time basis. 3. To be a self-sustaining organization by : (a) Increasing the growth in revenue from the existing CAGR of 6% per annum to more than 12% per annum, so as to more than double the revenue from the existing Rs.5500 crore in the year 2007-08 to Rs.12,000 crores in the year 2013-14. The increase in total revenue in the year 2009- 10 is
58

INDIAN POST OFFICE AND BANKING

targeted to be Rs.890 crores, Rs.1350 in 2010-11, Rs.1350 crores in 2011-12, Rs.1400 in 2012-13 and Rs.1400 crores in 2013-14. The major components of the increase in revenue are the following:
2004-05 revenue 4010 2005-06 4257 5632 -1375 2006-07 4431 5813 -1382 2007-08 5023 6233 -1210 2008-09 5322 6571 -1249 2009-010 5495 7006 -1511

expenditure 5374 Deficit -1374

i) To increase the growth in traffic of mail volumes from the existing declining and near stagnating state by 50 crores in the year 2009-10 and thereafter increase of 100 crores in each of the subsequent years 2010-11, 2011-12, 2012-13, 2013-14. Thus the total mail volume in the year 2013-14 would be approximately 1100 crores. As the focus would be mainly on increasing the mail volume through bulk mails such as financial statements pertaining to credit cards, mobile services, insurance, etc., the average revenue per article can be taken as at least Rs.3/-. Consequently, the incremental revenue on account of growth in mail volume would be Rs.150 crores in the year 200910, and Rs.300 crores in each of the subsequent years 2010-11, 2011-12, 2012-13, 2013-14. ii) To increase the growth in traffic of registered articles from the existing near stagnating state (20 crores) by 10% so as to increase the traffic by 50% in five years time. This would mean an incremental traffic of 2 crores in each of the subsequent years, i.e., 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 so that the total traffic in the
59

INDIAN POST OFFICE AND BANKING

year 2013-14 would be 30 crores. Consequently, the increase in revenue would be Rs.50 crores in each of these years. iii) To maintain the growth in traffic of Speed Post articles at the existing 15% to 20% and continue to be a market leader in express segment. The increase in revenue on account of Speed Post is targeted to increase from the existing Rs.455 crores by Rs.100 crores in 2009- 10, and by Rs.150 crores in each of the remaining years 201011, 2011-12, 2012-13, 2013-14. Consequently, the revenue on account of Speed Post is projected to be Rs.1155 crores in 2013-14. iv) To have a focused approach on parcel products including ecommerce and logistics by devising customized products including the facilities of tracking the movement of these products. The revenue on account of parcel products including e-commerce and logistics is targeted to increase by Rs.100 crores in 2009-10, and by Rs.200 crores in each of the remaining years 2010-11, 2011-12, 2012-13, 2013-14. Consequently, the revenue on account of parcel products including e-commerce is projected to be Rs.940 crores in 2013-14. v) To have a focused approach on the global business comprising of international mails, parcels and financial remittances so as to generate an incremental revenue of Rs.10 crores in 2009-10 and Rs.50 crores in each of the years 2010-11, 2011-12 and Rs.100 crores in each of the years 2012-13 and 2013-14. Consequently, the revenue on account of global business is projected to be Rs.310 crores in 2013-14. vi) To increase the growth in traffic of financial remittance from the existing near stagnating trend so as to more than double the revenue from financial remittance in five years time. The existing revenue on account of financial remittances (Money Orders) is targeted to increase from the existing amount of Rs. 375 crores by Rs.50 crores in 2009-10 and Rs.100 crores in each of the remaining years 2010- 11, 2011-12, 2012-13, 2013-14.

60

INDIAN POST OFFICE AND BANKING

Consequently, the revenue on account of financial remittances including Money Orders is projected to be Rs.825 crores in 2013-14 vii) To increase the number of savings accounts of all types by 1 1.5 crores additional accounts in each year so as to increase the number of accounts from the existing 17.3 crore to 22 crore, i.e., an increase of 30% by 2011-12. Assuming a modest increase in remuneration per savings account, the increase in revenue on account of Savings Bank is targeted at Rs.180 crores in 2009-10 and Rs.200 crores in each of the remaining years 2010-11, 2011-12, 2012-13, 2013-14. Consequently, the revenue on account of savings accounts is projected to increase from the existing Rs.2170 crores to Rs.3150 crores in 2013-14. viii) To increase the revenue on account of Cash Certificates from the existing Rs.430 crores by Rs.50 crores in each of the subsequent targeted to increase by Rs.100 crores in 2009-10, and by Rs.200 crores in each of the remaining years 2010-11, 2011-12, 2012-13, 2013-14. Consequently, the revenue on account of parcel products including e-commerce is projected to be Rs.940 crores in 2013-14. v) To have a focused approach on the global business comprising of international mails, parcels and financial remittances so as to generate an incremental revenue of Rs.10 crores in 2009-10 and Rs.50 crores in each of the years 2010-11, 2011-12 and Rs.100 crores in each of the years 2012-13 and 2013-14. Consequently, the revenue on account of global business is projected to be Rs.310 crores in 2013-14. vi) To increase the growth in traffic of financial remittance from the existing near stagnating trend so as to more than double the revenue from financial remittance in five years time. The existing revenue on account of financial remittances (Money Orders) is targeted to increase from the existing amount of Rs. 375 crores by Rs.50 crores in 2009-10 and Rs.100 crores in each of the remaining years 2010- 11, 2011-12, 2012-13,

61

INDIAN POST OFFICE AND BANKING

2013-14. Consequently, the revenue on account of financial remittances including Money Orders is projected to be Rs.825 crores in 2013-14. vii) To increase the number of savings accounts of all types by 1 1.5 crores additional accounts in each year so as to increase the number of accounts from the existing 17.3 crore to 22 crore, i.e., an increase of 30% by 2011-12. Assuming a modest increase in remuneration per savings account, the increase in revenue on account of Savings Bank is targeted at Rs.180 crores in 2009-10 and Rs.200 crores in each of the remaining years 2010-11, 2011-12, 2012-13, 2013-14. Consequently, the revenue on account of savings accounts is projected to increase from the existing Rs.2170 crores to Rs.3150 crores in 2013-14.

62

INDIAN POST OFFICE AND BANKING

Targeted increase in revenue year wise (in Rs corer)


Activity Mails registered articles Speed post Parcel products including ecommerce Global business Financial remittances Saving bank Cash certificates Mutual funds PLI/RPLI Retail post/business total 890 1350 1350 63 1400 1400 50 50 100 100 50 100 100 50 100 100 50 100 100 50 100 180 50 200 50 200 50 200 50 200 50 50 100 100 100 100 10 50 50 100 100 100 100 150 200 150 200 150 200 150 200 2009-10 150 50 2010-11 300 50 2011-12 300 50 2012-13 300 50 2013-14 300 50

INDIAN POST OFFICE AND BANKING

EXPLANATORY MEMORANDUM ON GOALS/OBJECTIVES


1). Post within easy reach of all: The Department has a USO for providing basic services to the citizens who will be reflected in its ability to provide affordable and accessible services to all the citizens. More than 70% of the population lives in rural areas in more than 5 lakh villages. Presently, they are being provided basic postal facilities in terms of delivery of mails through an unfixed daily delivery system. Most of the villages are not covered through a point of presence by having a post office, even in the case of Gram Panchayat villages. In fact, against 2.35 lakh Gram Panchayats, only 1.15 lakh Gram Panchayats are having post offices. There is, therefore, a need to expand the postal network in the rural areas. Moreover, as the result of large-scale urbanization and industrialization there is also a need to expand the postal facilities in the urban areas. 2.) To be a focal point for delivery of all social security schemes : The post offices are already delivering social security schemes such as old age pension scheme, National Rural Employment Guarantee Scheme, etc. This would require networking all the post offices especially in the rural areas so that information can flow on real time basis. 3.) To be a self-sustaining organization by the year 2013-14: The revenue expenditure gap is on the increase mainly because of substantial increase in the salaries of the employees. In order to fulfill its social obligation, there is a need for the Department to be self-sufficient. It can be seen from the table below that on an average the net increase in revenue is about Rs.200-Rs.250 crore except for one year 2005-06 when the increase by 600 crore. The increase in expenditure is around Rs.300 crore. Consequently, the deficit is in the range of Rs.1200 RS.1400 crore. However, with the increase in salary and allowances due to the 6th Central Pay Commission, the deficit during the current year is likely to be more than 4000 crore at the existing rate of net increase in revenue. Achieving financial self-sufficiency would, therefore, require
64

INDIAN POST OFFICE AND BANKING

focusing on those products or group of products which are likely to generate substantial increase in revenue. I) Mails including business mails ii) Speed post iii) Parcels including e-commerce and logistics iv) Savings bank v) Cash certificates vi) Financial remittance vii) Mutual funds viii) Life Insurance

65

INDIAN POST OFFICE AND BANKING

10.COMPARISON OF INDIAN POST AND BANKS

DEPARTMENT

PUNJAB BANK

NATIONAL

TYPE

Agency of the govt Public of India SBI)

(BSE,NSE- Public(BSE,NSEPNB)

FOUNDED

1764

Kolkata( as a bank LAHORE,1895 of calcuta) 1806

HEAD QUARTERS KEY PEOPLE

New delhi Smt. gopinath


(director general)

Mumbai Padmini Arundhati bhattcharya (chairperson)

New delhi KR Kamath

66

INDIAN POST OFFICE AND BANKING

INDUSTRY

Post

card

,postal Credit

Credit cards, consumer banking, corporate

stamp , Speed post, cards, consumer e-payment , logistic banking, corporate

payment , Business banking,finance and banking,finance and post, Money order , insurance,investme NSC, KVP , SBA , nt MIS , IMO. banking, mortgage loans, private banking, wealth management insurance,investme nt banking, mortgage loans, private banking, private equity, wealth management

EMPLOYEES BRANCH

5,30,200 157,385

2,90,287 16,980

62,127
-------

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INDIAN POST OFFICE AND BANKING

11.. FINDINGS

INTERVIEW WITH POST OFFICE CENTER MASTER

1. How to open an account in post office and its requirements?

To open an account [Savings Bank (SB), Recurring Deposit (RD), Time Deposit (TD), Monthly Income Scheme (MIS) SB3, SB103 (pay-in-slip) and specimen signature slip for SB and TD are required.

For senior citizen accounts, separate forms are to be used. For SB account introduction is compulsory.

2. Whether any nomination facility is available for


account ?

Savings

Bank

Account in Post Office ? Whether a minor can open a Saving

Yes

Nomination facility is available for all individual accounts

except

in Minor accounts. Yes, If he is of 10 years of age he can open account otherwise guardian can open for him .

3. What are the norms for issuing a Cheque Books?


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INDIAN POST OFFICE AND BANKING

Cheque

books

are

issued

in

respect

of

cheque

accounts.

In a cheque account, minimum balance should be INR. 500/-

4. How your recurring deposit is is different from the banks

A post office recurring deposit account (RDA) is similar to a recurring deposit in a bank, where you can invest a fixed amount on a monthly basis. The postal RDA has a fixed tenure of five years. The advantage with post-office deposits is that it offers a fixed rate of return for the duration of the deposit, while banks constantly review their recurring deposit rates.

5. In recurring deposit do you provide customer a facility where he can withdraw amount before maturity ?

Yes , Premature closure is permitted on completion of three years from the date of Opening . Premature withdrawal, however, cannot earn you desired returns.

6. Can you tell us something about time deposits in post office?

Just like banks' fixed deposits (FDs), post office time deposits are meant for those investors who want to deposit a lump sum for a fixed period. Time Deposits are of 1 year, 2 year, 3 year and 5 year tenures. The minimum investment should
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INDIAN POST OFFICE AND BANKING

be Rs 200 and its multiples. In case of postal time deposits, the account can be closed after 6 months but before one year of opening the account. On such closure, the amount invested is returned without interest. If a time deposit of two or three years is withdrawn prematurely, post office will pay interest only for the completed year or years.

7. What is the present rate of interest for Time Deposit (TD) accounts?

For 1 and 2 Year and 5 year

8.20 % per annum For 3 year

8.30 % Per annum

8.40 % per annum

8. What are the benefits and features of monthly income scheme (MIS)?

The Minimum investment amount is Rs.1500/- or in multiple thereafter. A single account can hold maximum amount up to Rs. 4.50 lakhs and in case of a joint account Rs.9 lakhs is permissible. Interest rate of 8.5% per annum payable monthly The Maturity period is 5 years.

9. Like other banks have internet banking, does Indian post office banks
have any scope of internet transactions.

Yes we have Instant money order (IMO) facility. IMO is a web based instant money transfer service offered by India Post between two individuals within India.

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INDIAN POST OFFICE AND BANKING

A minimum of INR 1,000/- and a maximum of INR 50,000/- can be sent through iMO.

10. Can you tell us the working procedure of imo Money can be sent from any iMO center. A simple To Remit Payment form is to be filled up and submitted along with the remittance amount and commission at the iMO counter. A printed receipt with a sealed computer generated confidential 16-digit iMO number is issued to the remitter. The number has to be conveyed by the remitter to the payee by phone, SMS, e-mail or any other means. The payee can collect money from any iMO post office on presentation of the 16-digit iMO number and production of photo-identity proof. While receiving money the payee will have to fill a simple To Make Payment form.

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INDIAN POST OFFICE AND BANKING

11. What is the minimum balance required for an account?

Minimum balances in respect of different types of account are given below. SB(cheque account) SB(non cheque account) MIS TD PPF Senior Citizen INR. 500/INR. 50/INR. 1500/INR. 200/INR. 500/INR. 1000/-

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INDIAN POST OFFICE AND BANKING

QUESTIONNAIRES ON CUSTOMER

The survey was conducted on 50 people belonging to different age group and different sex. After conducting the survey the findings are as below-

1) What do you prefer for your interest? a) Post office Sr. no 1) 2) b) Bank Option Post office bank Total Frequency 20 30 50 % 40% 60% 100%

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INDIAN POST OFFICE AND BANKING

70% 60% 50% 40% 30% 20% 10% 0%

60%

40%

18-30 bank 60%

above 30 post office 40%

According to the survey conducted, indicate the that 18-30 ages respondent selected bank and above 30 ages respondent selected post office. The percentage is 60% and 40% respectively.

MY OPINION Middle aged person and senior citizens are more into Indian post office banks. The main reason for this could be because they are following traditional banking services and does not like modern banking facilities.

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INDIAN POST OFFICE AND BANKING

2) Why do you prefer post office saving?

a) More interest

b) safety

c) Uncertainty bank

Sr no 1 2 3

Option More interest Safety Uncertainty bank Total

Frequency 5 30 15 50

% 10% 60% 30% 100%

uncertainty in bank safety more interest 0% 10% 20%

30% 60%

more interest 10%

40% 60% uncertainty in safety bank 60% 30%

80%

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INDIAN POST OFFICE AND BANKING

In the study, examining and analyzing of the 5 respondent selected more interest, 30 respondent selected safety and 15 respondent selected uncertainty in bank. The percentage is 10%,60%,and 30% respectively..

MY OPINION

According to me the people who prefer post office are more concerned about safety comparing to uncertainty and more interest. They feel that modern banks are not safe and they charge high commission and interest for the facility and services given .

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INDIAN POST OFFICE AND BANKING

3) How do you transact in post office?

a) Through Agent Sr no 1) 2) Option

b) yourself Frequency 35 15 50 % 70% 30% 100%

Through agent yourself Total

,0,0

yourself, 30% through agent, 70%

According to the survey the

35 respondents selected through agent, 30

respondents selected yourself option. The percentage is 70% and 30% respectively. MY OPINION

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INDIAN POST OFFICE AND BANKING

The most inhabits of 70% wants to save their time from getting into the long queue, the prefer agents because they do not consume so much of time and rest of the people are inhabitants of non agent service

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INDIAN POST OFFICE AND BANKING

4) Are you satisfied with your post office agent?

a) Yes Sr no 1) 2) Option Yes no Total

b) no Frequency 30 20 50 % 60% 40% 100%

70% 60% 50% 40% 30% 20% 10% 0%

yes no

yes 60%

no 40%

According to the survey 30 respondent selected yes option, and 20 respondent selected no option. The percentage is 60% and 40% respectively MY OPINION The inhabitants of 40% say that the agents do not focus more on their work and rest says that they are happy with the quality of their agents service
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INDIAN POST OFFICE AND BANKING

5) Does your agent up to date you about new scheme?

a) Yes

b) no

Sr no 1) 2)

Option Yes no Total

Frequency 35 15 50

% 70 30 100%

80% 60% 40% 20% 0%

yes no

yes 70%

no 30%

The survey shows that 35 respondent selected yes option, and 15respondent selected no option. The percentage is 70% and 30%% respectively.

MY OPINION The majority people always get updated from their agents about new products. The rest says that they arent aware about the new products. The main reason for this could be that agents get commission for providing services.
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INDIAN POST OFFICE AND BANKING

6) Do you think post office saving is better than bank saving?

a) Yes Sr no 1) 2) Option Yes no Total

b) no Frequency 30 20 50 % 60% 40% 100%

no yes 0% yes 60% 50% no 40% yes 100%

It shows that 30 respondent selected yes option, and 20respondent selected no option. The percentage is 60% and 40% respectively. MY OPINION The reason behind of majority to going for affirmative answer is that they can get office in village also , and in emergency they have to send some money to their native place especially in rural area So the family can get the money easily .
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INDIAN POST OFFICE AND BANKING

7 According to you which are the more preferred saving scheme? a) Monthly income scheme c) Time deposit b) recurring deposit d) public provident fund

Sr no 1) 2) 3) 4)

Option Monthly income scheme Recurring deposit Time deposit Public provident fund Total

Frequency 20 15 5 10 50

% 40% 30% 10% 20% 100%

public provident fund, 20% time deposit, 10% recurring deposit, 30% monthly income scheme, 40%

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INDIAN POST OFFICE AND BANKING

The survey shows that

20 respondent selected monthly income scheme,

15

respondent selected recurring deposit, 5 respondent selected time deposit and 10 respondent selected public fund . respectively. The percentage is 40%, 30%,10%, and 20%

MY OPINION

According to Indians perception if a person earns 1 rupee he feels he should spend 50 paise and save the remaining 50 paise. People who earn on monthly basis follow this perception and as a result of this the post office MIS scheme salaried people are more attracted to this form of deposit.

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INDIAN POST OFFICE AND BANKING

8) Do you transfer any money through the post office?

a) Yes Sr no 1) 2) Option Yes no Total

b) no Frequency 40 10 50 % 80% 20% 100%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

yes

no

yes 80%

no 20%

The survey shows

that 40 respondent selected yes option, and 10 respondent

selected no option. The percentage is 80% and 20% respectively. MY OPINION Most of the people who have account in post office prefer to do money transfer because post offices are best known for their money transfer services
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INDIAN POST OFFICE AND BANKING

9) Are you satisfied with your post office service?

a) Yes

b) no

Sr no 1) 2)

Option Yes no Total

Frequency 25 25 50

% 50 50 100%

,0 ,0

no, 25%

yes, 25%

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INDIAN POST OFFICE AND BANKING

The survey reveals that 25 respondent selected yes option, and 25 respondent selected no option. The percentage is 50% and 50% respectively.

According to my opinion inhabitants who are saying no have a reason that There are varying levels of infrastructure. The infrastructure is inadequate in newly developed urban pockets and in rural areas. Customers are unable to get full benefits of IT induction such as track and etc, due to limited use of technology. Customers have a perception of poor service trace

10) Any suggestions you wont to make for improve in customer service?

Most of the people said that they want new scheme in the postal services. And more improvement in customer service.

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INDIAN POST OFFICE AND BANKING

11.CONCLUSION
Indian post office is one of the oldest government organization who is serving till yet. Its main phenomena was to serve the country in the field of communication but when country were facing its hard time for banking services , Indian post office was there to aid it. Indian post helps Indian economy to heal up from bad situations. In early 1970 to late 1990 post done a really great job but afterward SBI had overtook its banking sector and did a great job to rural area. Indian post office in its time had done a amazing work for rural development . According to survey , most of the people belief in bank comparing to post office because bank have number of banking product . They think that banking has better services comparing to post office and the rest of the people who choose post office as preference because of their old faith in India post. The people who prefer Indian post office are likely from the age group 50 to 65. Indian post offices have more branches comparing to any other bank . They have more employees , more services , strong network and efficient manpower but there main weaknesses are lack of advertisements, no loan to customer , unchanged working culture, job stress among employees and lower rate of interest . These are the reason why Indian post are lacking behind, so we can say that if strength of Indian postal is very strong and if it make certain changes in its policies it can remove its Weaknesses and really come from the problem. It can be concluded that , that Indian post needs technological , social , cultural and economic change . With little bit of change it can create monopoly in the market. But Indian postal services is only central government services for Indian peoples as well as KVP , NSC, MIS and other some product which is best campier to other private banks.
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INDIAN POST OFFICE AND BANKING

12.WEBLIOGRAPHY 1. 2. 3. 4. www.google.com www.postoffice.com www.wikpedia.com www.eastindiavyapaper.com

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INDIAN POST OFFICE AND BANKING

13. ANNEXURE INTERVIEW WITH POST OFFICE CENTER MASTER

How to open an account in post office and its requirements?

Whether
account ?

any

nomination facility

is

available

for

Savings

Bank Saving

Account in Post

Office ? Whether a minor can open a

What are the norms for issuing a Cheque Books?

How your recurring deposit is is different from the banks

In recurring deposit do you provide customer a facility where he can withdraw amount before maturity?

Can you tell us something about time deposits in post office?

What is the present rate of interest for Time Deposit (TD) accounts?

What are the benefits and features of monthly income scheme (MIS)?

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INDIAN POST OFFICE AND BANKING

Like other banks have internet banking, does Indian post office banks have
any scope of internet transactions.

Can you tell us the working procedure of IMO

What is the minimum balance required for an account?

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INDIAN POST OFFICE AND BANKING

QUESTIONNAIRES ON CUSTOMER
What do you prefer for your interest? Why do you prefer post office saving? How do you transact in post office? Are you satisfied with your post office agent?

Does your agent up to date you about new scheme?

Do you think post office saving is better than bank saving?

According to you which are the more preferred saving scheme? Do you transfer any money through the post office?

Are you satisfied with your post office service? Any suggestions you wont to make for improve in customer service?

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INDIAN POST OFFICE AND BANKING

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