Discontinuation of Commission under Pay Roll Savings Schemes - Department of Posts

Discontinuation of Commission under Pay Roll Savings Schemes - Department of Posts

F.No 113-03/2017-SB

Govt. of India
Ministry of Communication
Department of Posts
(F.S. Division)

Dak Bhawan, New Delhi-110001
Dated: 05.07.2017

To,
All Head of Circles/Regions
Addl. Director General, APS, New Delhi

Subject : Discontinuation of Commission under Pay Roll Savings Schemes.

Sir/Madam,
In continuation of SB Order 09/2016 dated 23.09.2016 the undersigned is directed to say that Ministry of Finance, Department of Economic Affairs (Budget Division) New Delhi, vide its Memorandum No. 1/4/2015-NS.ll dated 12.05 2017, has conveyed that commission on Pay Roll Savings Scheme had been discontinued w.e.f. 01.10.2016. Now MOF has conveyed that only commission on PRSS has been discontinued and not the scheme, willing establishment can operate the scheme voluntarily without claiming commission . However, it needs to be ensured that no commission is paid by any post office to any Pay Roll Savings Group w.e.f. 01.10.2016. Case any commission has been paid after 01.10. 2016, necessary recovery be made.

2. This may kindly be circulated to all CBS and Non-CBS Host Offices for information and necessary guidance. This should also be placed on the Notice Board of all the Post Offices.

3.This issue with the approval of Competent Authority.

Yours faithfully,
sd/-
(P.L. Meena)
Assistant Dire tor (SB-1)

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Government allots Rs 1,300 crore to Post Bank

Government allots Rs 1,300 crore to Post Bank

NEW DELHI: The expenditure department has decided to sanction Rs 1,300 crore to the proposed Post Bank of India to meet its capital requirements even as the department of financial services (DFS) - the wing in the finance ministry that deals with state-run banks and their policies – chose to stay away from the issue.

The proposal's backing by the expenditure finance commission and its subsequent green light by finance minister P Chidambaram is seen as the official go-ahead by the finance ministry, ignoring the DFS's stance. The DFS position is seen as the first instance of the agency not backing the Post Bank's plan, which officers in the department have privately mocked at.

"They think they can use the postal deposit model for their banking foray. Nothing in their plan seems to be clear. Banking isn't easy," said an officer, who did not wish to be identified. In fact, a strong Post Bank is seen to be the biggest challenge to existing public sector banks, including State Bank of India, which controls 70% of the banking business in the country. SBI, the largest lender, has a little less than 15,000 branches, while there are over 1.5 lakh post offices across the country.

Although Post Bank does not intend to open a bank branch in each post office, the plan is to use postmen to meet the financial inclusion goal. Secretary (posts) P Gopinath refused to speak to TOI despite several attempts.

According to the plan, Post Bank will have 50 branches in the first year, which will be increased to 150 by the fifth year. The branches will be located in select Head Post Offices in Tier-1-4 centres and select Sub-Post Offices in Tier-5-6 centres.

To meet RBI norms, the postal department proposes to set up a new entity - Post Bank of India - that will have an independent board and separate operations. Apart from independent directors, the board will have representatives from the finance ministry and the postal department. Separate recruitment has been planned to have specialist bankers.

While converting the entire postal network would have meant a capital requirement of over Rs 60,000 crore, by setting up a special entity, the fund requirement has been reduced. This, officers said, will also help create a more focused strategy.

Source : http://timesofindia.indiatimes.com/

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Department of Posts: India Post’s bank plans meet hurdle

Department of Posts: India Post’s bank plans meet hurdle

The Department of Financial Services (DFS) has opposed the proposal of the Department of Posts (DoP) to apply for a banking licence. According to the DFS, though the network of post offices is large with 1.55 lakh offices across the country, they neither have an interconnected system in place to give people access to their money anywhere and at anytime like the banks, nor experience in lending.

“A Cabinet note is being circulated by the DoP for them to apply for a banking licence. But we are against the move,” a senior DFS official told FE.

The DoP wants to start a bank initially with at least 40-50 branches – with one or two in each state – with a focus on lending to small and medium enterprises and gradually over a period of ten years increase the branch network to around 800 by going into rural areas. According to the RBI guidelines, the initial minimum paid-up voting equity capital for a bank should be Rs 500 crore, while the DoP has sought a capital of Rs1,900 crore for its banking venture, sources said.
The DFS official, however, said the DoP's plan seems “half-baked” as it was “not clear on how they will evolve a system like the banks have to help their depositors access money easily anywhere at anytime.”

“Banking is a different ball game altogether. It will require a lot of training for the post office staff to learn the rules. It will not be easy for DoP to run a full-fledged bank,” the official said, adding that a lack of experience in lending is also a drawback for the DoP.

The DoP, however, is keen to submit its application to the RBI before the July 1 deadline and the bank will be set up a through a wholly-owned Non-Operative Financial Holding Company (NOFHC). The DoP had taken the help of consultancy firm Ernst & Young in preparing its strategy. “The main benefit (in giving a bank licence to DoP) is that it will help boost the financial inclusion plan,” said Ashvin Parekh, national leader (global financial services), Ernst & Young. The Cabinet note was prepared on the basis of the Ernst & Young report.

The DoP intention is not to convert all its post offices into banks, but wants a separate banking entity for which it has decided to hire a separate team of professionals, sources said. It has already spent around R200 crore in the last four years to put up a core banking solutions-like system in place, they added.

Incidentally, the Indian government had started a R4909 crore-worth information technology-driven project to modernise the postal network. The government had allocated R532 crore in 2013-14 to make post offices a part of the core banking solution and help it offer real time banking services.

The DoP also pointed out that the post offices reach even the remote corners of the country as the network includes 1.4 lakh post offices in rural areas, 15,000 in urban areas and another 30,000 points of presence. Post offices already offer many financial services for urban and rural people including savings accounts, recurring deposit accounts, monthly income schemes, public provident fund, time deposits, senior citizens savings scheme, national savings certificates and postal life insurance. Besides, post offices also offer money remittance services, distribution of mutual funds and securities and are also provide electronic international money order service and forex services.

The DoP also provides services on the new pension scheme and retail services such as sale of forms and bill collection. The DoP is also a government agent for providing services on Mahatma Gandhi National Rural Employment Guarantee Scheme wage disbursement and old age pension payments.

Source : www.financialexpress.com
[http://www.financialexpress.com/news/india-post-s-bank-plans-meet-hurdle/1130814]

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