It seems
that the Post Bank of India (PBI) may become a reality in the near future. For
the last more than fifteen years we have been told about the Post Bank and even
the Parliamentary standing committee on Communications & IT has repeatedly
demanded the Government for commencing Post bank. Several attempts have been
made, but the Finance Ministry always took a negative stand, for one reason or
the other. Majority of the bank managements including nationalized banks have
been opposing the entry of the Postal department into commercial banking. The
reason is obvious. They foresee a potential threat to their existence once Post
Bank enters into their field and during the course of time the Post Bank may
become one of the biggest Bank.
Post Bank of India will be an independent entity, separate from the
current operations of small savings schemes being carried out by the Department
of Posts on behalf of Ministry of Finance. Department has accordingly submitted
an application to the Reserve Bank of India (RBI) on 28.06.2013 seeking banking
license subject to necessary cabinet approval. RBI has said that new banks will
have to set up at least three branches in villages with a population of less
than 10000, for each branch they establish in other areas. Although Post Bank
does not intend to open a bank in every Post office, the plan is to meet the
financial inclusion goal through these Post offices. India Post had 1,54,822
Post offices across the country as on 31.03.2013, the largest for any department
in the world, and close to 90% of them – 1,39,086 – are in rural India. This is
more than four times the number of rural branches run by India’s Banks put
together. According to plan prepared by Ernst & Young, India Post will
become Post Bank of India’s banking correspondent. PBI will use Post office
infrastructure but very frugally. Carefully done PBI can be a game – changer in
rural areas.
India post is among 26 applicants that sought banking licenses from RBI.
India Post has to develop the standards to meet RBI guidelines. In its
guidelines for new banking licenses announced on 22nd February 2013, RBI
required applicants to prove their eligibility on several fronts – from
promoter holding to past experience to business plans. The minimum capital
required by the applicants for license is Rs. 500 crores and foreign share
holding in the new banks is capped at 49% for the first five years. The new
banks have to be set up under a non-operative Financial Holding company
(NOFHC). They also have to maintain minimum capital adequacy ratio –the ratio
of risk weighed assets, a measure of financial strength of the bank –of 19 %
for the first three years. New banks also need to list their shares within
three years of starting operations.
The main argument put forward by those opposing the Post Bank is that
Postal department has no experience when it comes to giving credit (loans).
Department has only been taking deposits till now. Sanctioning and disbursing
of credit needs an entirely different aptitude. India Post has no specialized
experience in the business. It is reported that unlike many believe, the Post
Bank of India will be a completely new entity with no legacies of a government
department and very little to do with its parent department, except using some
of its network. It will have an independent Board. Separate recruitment has
been planned to have specialised banking staff. Of course, the Post Bank will
be a subsidiary organisation of India Post, which need to be registered as a
public sector Bank and Government equity in this new entity could be diluted.
Whatever reforms and regulations Government implements in Nationalised Banking
sector will be fully applicable to Post Bank of India also.
There are many talented and qualified Postal employees who want to
switch over to the Post bank and to work as employees under the Post Bank. The
reports that separate recruitment will be made for the Post Bank has cast
shadow upon their hope to work in the Post Bank. NFPE demands that the existing
Postal employees who want to switch over to the Post Bank shall be given chance
to exercise option and if need be a trade test to assess their capability can
also be conducted before selection. Selected officials can be imparted with
intensive training in commercial banking business. In any case 100% open market
direct recruitment is an injustice to those talented Postal employees who may
not be able to apply for open recruitment due to age factor etc. we urge upon
the Postal Board and Finance Ministry to give due consideration to this aspect,
before the new Bank is rolled out.
Source :
http://nfpe.blogspot.com/
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