The Hindu Business Line : India Post keen to offer banking services

STRATEGIC TIE-UP: Mr M. V. Nair, CMD, Union Bank of India, and Ms. K. Noorjehan, Principal Chief Postmaster General (Maharashtra Circle), Indian Post, at a press conference in Mumbai on Thursday. - Paul Noronha

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Mumbai March 1 The `Dakiya', the Indian postman, is set to become a banker. The postman will now not only be the harbinger of good and bad news, but also offer loans, deposits and credit cards. For now, a number of banks are signing agreements with India Post to market their products. However, in the future, India Post could soon be making the transition to a banking entity.

Ms K. Noorjehan, Principal Chief Postmaster General, Maharashtra Circle, said a consultant would be appointed to look at the restructuring of India Post as well as to study the feasibility of setting up a `Post Bank of India'.

Senior officials said the bank could be a subsidiary of India Post. A few of the staff have already undergone some training at the National Institute of Bank Management, said an official.

As on March 31, 2006, India Post had around Rs 3.75 lakh crore as deposits and around 16 crore customers. Ms K. Noorjehan, said India Post has a tie up with Corporation Bank in Goa for selling loans. In addition, India Post has an agreement with Citibank (for selling credit cards) and Bank of Baroda.

Priority Loans

She said more tie-ups with banks like ICICI Bank were on the anvil but for varied products. Senior officials at India Post said it was also looking at various market options for investing its Rs 1,800 crore life fund (generated from life insurance sales) in Government securities and mutual funds.On Thursday, Union Bank of India tied up with the Maharashtra Postal Circle of India Post for selling priority sector loans.

Under it, post offices will identify prospective borrowers, help them choose appropriate schemes and assist them in filling up applications. Post offices can sell agriculture loans such as crop loans and loans for poultry, diary and tractors.

Mr M.V. Nair, Chairman and Managing Director, Union Bank, said this arrangement would initially be available in 56 branches in Maharashtra and would be gradually scaled up to 199 branches.

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