Madan Sabnavis underestimated the manpower of India Post

Madan Sabnavis (Chief Economist and General Manager of Credit Analysis & Research Limited) wrote an article, Why 'Post Bank of India' is not a workable idea, in Business Standard on 11/03/2014 without studying  anything about India Post and its rich manpower.  Most of the newly recruited employees of India Post are engineering graduates and other professional degree holders.  Shri. Madan Sabnavis underestimated the quality and efficiency of Postal staffs.  Postal staffs are the only employees who handle number of software and web application at a time in the same office to perform different types of duties.  Bank employees are doing transactions related to small number of products and they are handling one or two web applications.  Software handling capacity and technical knowledge of Postal Staffs are very high compared to Bank employees. Shri. Madan Sabnavis actually knows nothing about what is going on in India Post. Every bank is depending completely on third party institutions for technical and software support but India Post has one or two dedicated software development centers that develops software for foreign countries also.  Shri Madan Sabnavis should watch at least one or two postal blogs maintained by postal staffs to know something about the technological changes happening in Postal Department or he should get in touch with any Postal staffs before publishing blunders as research material.
From the article it can clearly see that Shri. Madan is a spokesman of Corporate and banking lobby and he has some hidden agenda in this regard.  All such persons are making campaign for preventing India Post from getting banking licence from RBI. They actually fear the entrance of India Post in banking sector directly or indirectly.


Comments posted against the original article are quite interesting and some of them are very correct reply to the author and it depicts the unawareness of the author about the new concept, Post Bank of India.  

Extract from the article, Why 'Post Bank of India' is not a workable idea by Madan Sabnavis

(.......................) On the operational side, there are even more interesting puzzles. First, the 474,000-strong workforce consists of 263,000 dak sevaks, and another 203,000 gazetted Group C staff. The so-called office cadre would not be more than 7,000. Most of the others would be barely literate and could classify and stamp documents but may not be expected to go beyond that. In fact, they would more likely be conversant with only the regional language. Can they actually pick up banking and go through the normal training courses and exams that bankers are expected to undertake?

 Second, none of the staff members would know how to garner and use deposits. At present, customers come and deposit money and the postal official really does not care if it happens. The quality of service is quite mediocre in a monopoly-cum-government set-up that lacks incentive to perform and where the "baksheesh" culture dominates for many transactions. A metamorphosis is needed as far as mindsets and culture are concerned - it is a challenge and costs money. If we replace the entire staff with trained bankers, what will happen to the existing ones?

 Third, specialised functions, such as treasury, lending, investment and balance sheet management, require skill sets that even the existing gazetted officials do not possess. This will mean wholesale recruitment where the logistics will be mind-boggling. The only way out is if it becomes a payments bank a la the recommendation in the Reserve Bank of India's (RBI's) report on inclusion. But then, it is already performing this function and need not be converted into a new bank.

 Fourth, most of these post offices in rural India are too small, probably just a little room where stamps and letters are dispensed and letters picked up and distributed. They may not be stand-alone branches for a bank.

 Fifth, starting the business will be complex, considering that the balance sheet has a size of Rs 6 lakh crore on the liabilities side, with no assets as such, with these funds being provided to the government. Based on just the deposits, the size of this department would be as large as that of Bank of India or Canara Bank. How does one reckon capital adequacy when there are only liabilities and no assets? At Rs 6 lakh crore and with a capital adequacy ratio of 10 per cent, the government will have to put in Rs 60,000 crore. Where will this money come from?

 Once we put all these considerations together, it seems an India Post Bank will probably not work. Several regulatory and logistic issues have to be surmounted. One line of thought is that if the infrastructure is the premise on which post offices can become banks, then these post offices should ideally be leased wherever possible to banks on rent - which will help the department cut its losses. Moreover, this will get us out of our predilection to create new structures instead of integrating the existing ones with the present system. In FY 2012, India Post reported a loss of Rs 5,805 crore. In fact, the new banks, which are expected to allocate at least 25 per cent of their new branches in unbanked rural areas, could leverage these structures so that it becomes a win-win situation for banks, the RBI and post offices

Courtesy: http://www.business-standard.com
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6 comments:

  1. The report is totally gives a wrong picture about the entire organization and about the skills and abilities of the staff... before writing any report about INDIA POST he should have made a ground work reality check.. whatever Mr Madan has mentioned is totally misleading...

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  2. I think mr. madan sabnavis.....doesn't know anything about india post .

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  3. I am not against POST Bank. Big struggle is ahead for existance and survival. There is great scope for PLI and other mail products. Improving these also help India Post to gain market share. Certain aspects are meaningful in his comments.

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  4. VERY FUNNY IT SEEMS THAT MR MADAN SABNAVIS SHOULD FIRST DO A PROPER REASEARCH, AS FAR AS THE LOSS IS CONCERN IT IS MAINLY BECAUSE OF GOVT POLICIES, SECONDLY WITH THE STAFF WHAT AT PRESENT WE ARE HAVING IS MORE OR LESS SUFFICIENT FOR PRESENT WORK MANAGEMENT AND ABOUT THE HARD WORK ABILITY AND CAPABILITES OF POSTAL STAFF IT IS A CHALLANGE THAT NO OTHE GOVT SET OF EMPLOYEES CAN DISCHARGE THESE SORT OF MULTIPLE FUNCTIONS AS THE POSTAL STAFF DOES FROM THEIR BASIC MAILS AND DELIVERY TO BANKING DEPOSITS WITH VARIOUS SCHEMES, SUCH AS SAVINGS BANK, RD, TD, MIS, SCS,PPF, NSS, CERTIFICATES SUCH AS NSC ,KVP IVP etc, in IN INSURANCE SECTOR PLI, AND LOGISTICS POSTS, PAYMENTS OF MONEY THROUGH WESTERN UNION MONEY TRANSFER, MONEY GRAM, MO VIDESH IMO, etc,THIS IS ONLY AN ICEBERGER WE ARE THE OCEAN, YOUR KNOWLEDGE APPEARS TO BE A OF A MERE IOTA WITH REFERENCE TO INDIA POST. YOU JUST VISIT OUR STAFF BLOGS "SA POST" etc YOU WILL KNOW WHAT WE ARE, HOW MANY SOFTWARES OUR OWN STAFF HAD DEVELOPED OUR STAFF SKILL IN RESPECT OF MODERN TECHNOLOGY, CAN'T YOU SEE HOW WE ARE HANDLING SANCHAYA POST, POINT OF SALE, SPEED NET, AND SEVERAL TOOLS, WHICH ARE SOLELY DEVELOPED BY OUR STAFF ONLY, JUST VISIT ONCE TO "CEPT" LOCATED AT PTC MYSORE AND SDC AT T-N, YOUR WILL SURELY REALISE OUR EFFORTS AND HARD WORK, WHEN IT COMES TO ACCOUNTING AND AUDITING, WHO ARE DOING THE JOB OF ACCOUNTING AT PRESENT OF THE DEPT, IS ANY BODY MORE EFFICIENT THAN US ,JUST CHECK OUR ACCOUNT HOW CRYSTAL CLEAR AND TRANSPARENT THEY ARE, NOT LIKE CORPORATE ACCOUNTS WITH SEVERAL MANIPULATIONS TO THE BALANCE SHEETS TO ATTRACT IT SHARES AND INTEREST. IT IS SURPRISING THAT A PERSON OF YOUR CALIBER KNOWS THIS MUCH ABOUT INDIA POST AND HAD WRITTEN A ONE SIDED SO CALLED ARTICLE. MR MADAN S. PLEASE , RE LOOK INTO YOUR ARTICLE, AND WRITE HONESTLY , SINCE, INDIA POST MOTIVE IS TO SERVE THE NATION, LIKE THE INDIAN ARMY , NOT TO MAKE PROFITS LIKE THE CORPORATES, THAT'S WHY YOU GET A NEWS PAPER THROUGH INDIA POST FOR JUST A MERE 0.25 PAISE ,WHICH NO OTHER DEPARTMENT IN THE WORLD CAN OFFER. THE CITIZENS OF THIS COUNTRY KNOWS OUR SERVICE, WE NEED NO CERTIFICATE FROM CORPORATE LOBBYIST.

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  5. Managing the public at the counter using nearly 10 software applications at the same time needs skill and practice. The works which were being done 6 or 7 years back are entirely different from the present works. It will be better if the author do a close study, observe and then post his opinion.

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  6. MADAN SABNAVIS , YOU ARE TOTALLY OUT-OF -DATE.

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