The Hindu Business Line : India Post seeks to issue charge cards in rural areas

IN a bid to make available cashless transactions to the rural regions of the country, India Post has proposed issuance of charge cards in alliance with the Mastercard International.

Sources said India Post has sought the approval of the Ministries of Finance and Law for the purpose. These approvals are necessary since India Post was created by statute.

India Post is keen to take advantage of the Finance Ministry's proposal to extend ATM (Automated Teller Machine) facilities to Kisan cardholders on a selective basis. The charge card for the rural population is meant as an extension or an alternative to the Finance Minister's proposal.

Customers, the sources said, could deposit money in any of the post office branches or franchisees in the country and purchase the charge cards. The cardholders could use them for purchases without having to carry large amounts of cash.

The sources said there would be a fee for the service though the modalities of the fee structure could be finalised only after the Government approves the scheme. Once the prescribed limits on the card is exhausted, customers will be able to recharge it in any of the post offices.

The sources said India Post, with 1.5 lakh offices, located even in remote corners of the country, is well better equipped for issuing these kinds of financial instruments. The largest bank in the country, SBI and its associates together has a reach of less than quarter of India Post. India Post, the sources said, also has a greater acceptance in the rural parts than any of the banks including the public sector.

Some technical issues need to be resolved for the issuance of the charge card. The key technical issues include having a clearing arrangement with one of the public sector banks, the sources said. Such a clearing arrangement would imply that on issue of the card, the amount would have to be debited from the postal department and credited to Mastercard.

Further, it would also need to tie up, electronically with potential points of sale, including shops and establishment. Though, India Post is widely networked by computers, the task of installation of point-of-sales terminals at the merchants establishments and shops need attention.

This would have to be done by Mastercard, the sources said, since the shops and establishments would become member establishments.

India Post's function would be confined to providing the distribution of the card on behalf of Mastercard, the sources explained.

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