India Post pushes ahead with banking plan despite opposition

India Post needs the government’s permission for the Rs.500 crore that is needed to set up a bank if it gets a licence from RBI. Photo: Hindustan Times

Mumbai: Despite strong opposition from the finance ministry, the postal department plans to approach the Union cabinet next month seeking capital of up to Rs.1,900 crore for a proposed commercial bank, according to two people familiar with the development.

To be called Post Bank of India, its branches will be linked to India Post’s vast network of post offices and will promote goals of financial inclusion, its supporters say.

“The department has decided to move the cabinet by October to seek the capital for Post Bank,” said a senior bureaucrat familiar with the proposal. The official requested anonymity, citing sensitivity of the matter. The second person, a consultant, also declined to be identified.

An email sent to financial services secretary Rajiv Takru on Tuesday remained unanswered at the time of writing this story.

India Post needs the government’s permission for the Rs.500 crore capital that is needed to set up the bank if it gets a licence from the Reserve Bank of India (RBI). While many government departments support the plan, some—mainly the department of financial services—have raised serious reservations, the official quoted earlier said.

India Post estimates an immediate requirement of Rs.700 crore and an additional Rs.1,200 crore in the first five years of its operations.

The move comes as the government prepares to launch a new bank exclusively for women with a capital base of Rs.1,000 crore.

The postal department, one of 26 contenders for banking licences, decided to rush with the proposal to the cabinet because it needs to convince RBI that it has enough funds if indeed Post Bank is shortlisted, the official said.

Global consultancy firm Ernst and Young LLP (EY) has drafted the blueprint for the proposed bank.

RBI governor Raghuram Rajan wants new banking licences to be issued by January-end, before deputy governor Anand Sinha, who has been spearheading the licensing process, retires. RBI is currently scrutinizing the applications and is also in the process of setting up a high-profile panel, to be headed by former RBI governor Bimal Jalan, to screen them.

Contenders for the new banking licences include L&T Finance Holdings Ltd, Aditya Birla Financial Services Group, Mahindra and Mahindra Financial Services Ltd, LIC Housing Finance Ltd, Tata Capital Ltd, IDFC Ltd, Reliance Capital Ltd and Bajaj Finserv Ltd.

In August, the expenditure department of the finance ministry had rerouted an earlier draft cabinet note from India Post seeking Rs.1,900 crore for the banking entry to another wing of the ministry. It asked the postal department to first seek the approval of the expenditure finance committee.

The expenditure finance committee, headed by the expenditure secretary, normally scrutinizes proposals for amounts of more than Rs.300 crore and for the creation of new autonomous organizations, regardless of the amount.

Within the finance ministry, the department of financial services opposes the move, saying the postal department does not have the expertise to run a bank, including handling credit and other banking functions. It feels the business proposal is unlikely to be viable.

But the postal department does not agree with this view, saying it has several years’ experience in deposit mobilization and that Post Bank of India will be run by professional management using its strong network. The postal department has close to 155,000 offices spread across the nation, as many as 139,040 of which are in rural areas.

Each rural post office covers around 6,000 people on an average, and urban post offices cover about 24,000 people each, according to a 2011 estimate.

As of 31 March, the outstanding balance under the Post Office Savings Scheme stood at Rs.6.05 trillion, equivalent of half the deposits of State Bank of India, the country’s largest commercial bank, and double that of the largest private lender ICICI Bank Ltd.

According to an interim report by EY in April, the proposed bank will focus on those at the bottom of the pyramid, or the poor, in non-metro centres, and avoid urban areas that are already well-served by existing banks.

People who already hold deposits with the Post Office Savings Scheme will have the option to transfer these to the proposed new bank, but this will not be compulsory, according to the official quoted earlier.

To begin with, Post Bank of India plans to open 300-400 branches, each also managing a specific number of postal outlets.

‘India' - A Philatelic Journey' book released by Hon'ble President of India

'India- A Philatelic Journey’, was released by Hon’blePresident of India on 3rd September, 2013 at Vigyan Bhawan in the inauguration ceremony of 11th Asian Pacific Postal Union Congress. The book gives a glimpse of our country having chapters on Mahatma Gandhi, freedom struggle, art & culture, wild life, flora & fauna, sports and heritage sites of India.

The book has been made in collaboration with the Times of India Group. The designing, printing and editing has been done by the Times of India Group. Thepackaging of the book is excellent; it is inside a beautifully designed Shrink –wrap box. The most important thing which differentiates it from other coffee table books is that real stamps are used to describe the above mentioned subjects. One side of the page have the text and other side have stamps related to the subject. Approximately 117 stamps issued since 1974 to 2012 have been inserted, in original, in each book. This book is a limited edition and exclusively for niche customers. Only 800 copies are available for sale.

The book can be purchased from National Philatelic Museum, Dak Bhawan, New Delhi. This will also be made available to major philatelic bureaux. Interested customers can also place their orders to the nearest bureaux or send an email to Shri V.K.Singh, ADG(Philately) on vksinghs@yahoo.co.in. The price of the book is kept as Rs. 5500.

Govt approves 10% dearness allowance hike, to benefit 80 lakh government employees, pensioners

NEW DELHI: The government on Friday approved a proposal to hike dearness allowance to 90% from existing 80%, a move that would benefit about 50 lakh central government employees and 30 lakh pensioners.

"The Union Cabinet approved the proposal to increase dearness allowance to 90% at its meeting. The hike would be effective from July 1, this year," a source said.

According to the source, the increase in DA to 90% would result in additional annual expenditure of Rs 10,879 crore. There would be additional burden of Rs 6,297 crore on exchequer during 2013-14 on account of this hike in DA.

This is a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10% to be given with effect from July 1, 2010.

DA was hiked to 80% from 72% in April, 2013, effective from January 1, this year.

As per the practice, the government uses CPI-IW data for past 12 months to arrive at a number for the purpose of any DA hike.

Ban on creation of posts, purchase of vehicles, cut in air travel, no change in LTC Air-travel entitlement etc. under economy measures

To view the copy of order issued by MOF, Department of Expenditure, please CLICK HERE.

Government may approve 10% DA hike on Friday, to benefit 80 lakh

There would be a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 per cent.

The Union Cabinet could approve a proposal to hike dearness allowance to 90 per cent from existing 80 per cent, a move that would benefit about 50 lakh central employees and 30 lakh pensioners.

"The Union Cabinet will take up for discussion and approval a proposal to increase dearness allowance to 90 per cent at its meeting scheduled on September 20. The hike would be effective from July 1, this year," a source said.

According to the source, the increase in DA to 90 per cent would result in additional annual expenditure of Rs 10,879 crore. There would be additional burden of Rs 6,297 crore on exchequer during 2013-14 on account of this hike in DA.

There would be a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 per cent to be given with effect from July 1, 2010.

DA was hiked to 80 per cent from 72 per cent in April, 2013, effective from January 1, this year.

Launch of IT Modernisation Awareness Survey

In an endeavor to get the feedback on the awareness of the IT Modernisation Project, the Change Management Vendor, M/s TCS is launching a quick poll on Thursday, the 19^th September 2013.

This is a short questionnaire which has been uploaded on an online survey tool (Survey Monkey) and will be sent by M/s TCS to the targeted staff members through email., starting 19 Sep'13.

        The staff members can respond to the questionnaire within a week time (19^th September to 25^th September).

Deduction of TDS at the time payment of quarterly interest from SCSS accounts, withdrawl from NSS-87 accounts, Payment of Commission to Agents and issue of TDS certificate in form 16A

To view SB Order No.10/2013 please Click Here.

FNPO Circle Conference -KERALA Circle-2014-reg

The Circle Conference of FNPO affiliated unions of Kerala has been Scheduled to be held on 4th,5th and 6th of MAY-2014 at PATHANAMTHITTA after Shri.K.P.Dhanapalan M.P, Chairman,FNPO,Kerala confirming it.

            FNPO,Pathanamthitta division welcomes all our activisits from various divisons to Pathanamthitta and make the conference a grand success.

India Post banking system roll-out moves to user acceptance

To view, please CLICK HERE.

Expected DA from Jan 2014 – Rates of Children Education Allowance may be revised again

All Central Govt Employees and Pensioners are expecting to hear the announcement of hike in the Dearness allowance by 10% from July 2013.

 

The Union Cabinet Committee may take the agenda point for approval on DA in the next meeting, which will be held on 19.9.2013 (Thursday).

 

Following the approval on DA, the total DA will go upto 90% and the DA may cross 100% very soon..!

 

As per the recommendations of 6th CPC, particular allowances will be increased by 25% every time the Dearness allowance payable on revised pay scales goes up by 50%. Therefore, once again the allowances, including Children Education Allowance will be increased by 25%, when the DA crosses 100%.

 

There is a slight confusion in the calculation of 25% in increasing Children Education Allowance from Rs.1000 or Rs.1250. Ofcourse, there is lot of time to discuss and decide the calculation factor..!