India Post as a banking platform

This hoary institution need not turn into a bank. But its rural outreach can help in financial inclusion

India Post has not been granted a banking licence in the current round of allocations. The Reserve Bank’s opinion is that the issue needs more analysis and the Government needs to be consulted.

In view of the fact that commercial banks have recorded high non-performing assets, their earlier efforts at extending financial inclusion cannot be easily replicated. 

Therefore, banks could now consider exploring possibilities with post offices, with a spatial reach, a high level of public trust, a wide customer base and generally well respected staff. 

Letters from the past

The Indian postal system has an illustrious history tracing back to the origins in the Mauryan era. The modern postal system was established and strengthened by Lords Robert Clive and Warren Hastings and the GPOs in Calcutta, Madras and Bombay were established in 1774, 1786 and 1793, respectively.

As of March 31, 2012, there were 1,54,822 post offices in the country, making it the largest network of its kind in the world, of which 90 per cent were in rural areas. In comparison, at the time of Independence, there were only 23,344 post offices, most of which were in urban areas. 

Historically, the first postal account was opened in the UK in 1861 to encourage the poor to save. The same began in India, soon after postal savings banks started — in 1882. 

Eventually, by 1896, post offices were the sole savings bank agencies mobilising small savings. They have been in the forefront of offering not only different types of banking facilities such as time and recurring deposits but also offering certificates of different denominations and social security schemes. 

In India, there were nearly 24 crore account holders availing postal banking services at the end of March 2012.

In contrast, there were nearly 90 crore deposits and 13 crore credit account holders in commercial banks of which 28 crore deposits and 4 crore credit account holders spread in 35,936 rural branches accounted for 9.4 per cent and 7.9 per cent, respectively of the total amount of deposit and credit of commercial banks. 

Financial inclusion

To enhance financial inclusion, post offices with significant presence in rural areas offer promise.

But to achieve that, should India Post metamorphose into a commercial bank or explore possibilities with banks suffering from sagging assets?

Internationally, there are a few countries which have tapped the postal institution for extending financial inclusion.

For instance, in Brazil, financial inclusion got a boost after Brazil Post formed a partnership with financial institutions. 

Some countries have even offered a banking licence to their post offices (China, France, Morocco), while in some other countries banking institutions have made working arrangements to offer services through the post offices (Algeria, Italy and the UK). 

However, some of the important criticisms against making a bank out of postal institution are lack of technology, different work culture and experience, and staff constraints such as skills, training and computer literacy levels.

In India, the contribution of small savings, despite concerted efforts by the Government since 1951, has been comparatively small compared to deposits with commercial banks, mainly because of the lack of ability to save and financial literacy amongst the segment of the population which banks with post offices.

Converting post offices into banks would not change that situation. Incidentally, nationalisation of banks — in 1955, 1969 and 1980 — was initiated to enhance banking penetration in rural areas, but that did not meet with significant success, given the work culture and skill levels of banking staff.

Saving more

However, the need is to inculcate banking habits in the rural unbanked population. For that existing infrastructure in post offices could be usefully explored successfully in different ways.

Since there are fewer rural bank branches than post offices, the costs of transacting business with banks are fairly high.

Banking services available at post offices, through time-specific extension counters of major commercial banks in the local area or the presence of business correspondents of banks, could reduce such costs and increase banking penetration.

To initiate banking habits with the rural population, post offices could start offering debit cards to account holders of postal bank accounts as well as providing information on those accounts through password protected internet portals.

Post offices could also facilitate use of electronic cards, credit and debit, for postal transactions for not only convenience of the user but also to encourage the use of banking facilities. 

This would enhance the financial literacy and awareness of banking services for the unbanked population.

Banks could make arrangements with post offices for dealing with remittances, as recommended by the Rangarajan Committee on Financial Inclusion in 2008. Similarly, banks could be invited to locate their ATM machines in the premises of the post offices.

While the use of plastic currency will make transacting easier and encourage banking habits among the unbanked population, it will also monetise the economy and help bring down the demand for currency notes and scarce coins significantly.

India Post has touched the life of every Indian. To preserve its heritage and extend its glory, post offices need not become banks, but could certainly consider a symbiotic business partnership with commercial banks to enhance financial inclusion and mobilise deposits.

The writer is RBI Chair Professor of Economics, IIM Bangalore

(This article was published on June 5, 2014) 

 

Source:http://www.thehindubusinessline.com/opinion/india-post-as-a-banking-platform/article6085981.ece

Postal stamps on Honourable PM -Narendra Modi issued in Bihar

A set of four postal stamps and a special cover on Prime Minister Narendra Modi conceptualised by a philatelist from Bihar has been issued by the Department of Posts (DoP).

"I conceptualised the stamps and special cover to mark the ascendancy of Narendra Modi as the Prime Minister of India. It was a popular event and not only our own country but the entire world was watching it with keen interest. The DoP issued it under 'My Stamp' series on May 26, the day he took oath," philatelist Pradeep Jain said.

The set of four stamps with a face value of Rs 5 each shows a smiling Modi in four different poses, covered with petals of flowers like Lily, Pansy and Dahlia.

The cover depicts a smiling Modi emerging from a fully blossomed lotus. The famous Navkar Mantra of the Jains is printed on the cover, which is titled 'The Power of Namo'.

The stamps and the cover were taken to Delhi by a senior Bihar BJP leader and presented to Modi and BJP President Rajnath Singh.

Seemingly impressed, the Ministry of External Affairs (MEA) has contacted him to get a few of them to send them to the neighbouring countries.

"I got the idea during the inauguration of Barack Obama as the US President in 2009. It was a popular global event and stamps were released in Washington. If people in US can do this, why can't we," asked Jain.

The philatelist, who is a member of Royal Philatelic Society, London, and the only Indian member of the International Association of Philatelic Experts, based in Innsbruck, Austria, scoured the internet to download four photos of Modi.

Jain then roped in senior artist Sapan Javeri of National Institute of Design (NID) to bring the concept on paper. Once everything was completed, the DoP was requisitioned to print 1,800 stamps. The entire operation stamp cost him Rs 75,000, which includes Rs 13,000 charged by the DoP.

What will he do with the stamps next? "I did it for my own happiness. I will now gift them to people who are keen about having Namo in their stamp collection," smiled Jain.

Source : http://www.dnaindia.com/india/report-postal-stamps-on-narendra-modi-issued-in-bihar-1991910

Source:http://sapost.blogspot.in/2014/06/postal-stamps-on-narendra-modi-issued.html

FM will give due consideration merger of da and interim relief: Pre-budget meeting with Central Trade Unions

The Union Finance Minister Shri Arun Jaitley said that the Government will give due consideration to the Ten Point Joint Charter of Demands including proper allocation of funds for merger of dearness allowance and interim relief, given by the Central Trade Unions while formulating the budgetary proposals. The participating Central Trade Unions gave a joint memorandum to the Finance Minister for his consideration and positive response.

CENTRAL TRADE UNIONS JOINT MEMORANDUM TO FINANCE MINISTER Source: BMS Date: 06 Jun 2014 20:38:30 6th June 2014 The Hon’ble Minister of Finance, Govt. of India, North Block, New Delhi Dear Sir, We welcome you over your takeover as Finance Minister of the new Govt. formed on verdict of the people of India and thank you for having invited the Central Trade Unions representing the most important stake holder, the working men and women of this country, in both organized as well as unorganized sector, to this pre-budget consultations. We wish that our candid observations, considered views and concrete proposals are taken in the right spirit and responded with all seriousness and given appropriate reflections in the ensuing budget 2014-15. Our proposals: Some of these specific proposals have time and again been placed by us in various policy making fora including the earlier pre-budget consultations. However, we would like to reiterate them, urging your positive response: Take effective measures to arrest the spiraling price rise and to contain inflation; Ban speculative forward trading in commodities; Universalise and strengthen the Public Distribution System; Ensure proper check on hoarding; Rationalise, with a view to reduce the burden on people, the tax/duty/cess on petroleum products. There must be massive investment in the infrastructure in order to stimulate the economy for job creation. It is our considered view that the Public sector should take the leading role in this regard. The plan & non-plan expenditure should be increased in the budget to stimulate jobs creation and guarantee consistent income to people. Minimum wage linked to Consumer Price Index must be guaranteed to all workers, taking into consideration the recommendations of the 15th Indian Labour Conference as enriched by Apex Court of the country as reiterated in 44th ILC in 2012. In any case, it should not be less than Rs.15,000/- p.m. FDI should not be allowed in crucial sectors like defence production, telecommunications, Railways, financial sector, retail trade, education, health and media. The public sector units played a crucial role during the year of severe contraction of private capital investment immediately following the outbreak of global financial crisis. PSUs should be strengthened and expanded. Disinvestment of shares of profit making public sector units should be stopped forthwith. Budgetary support should be given for revival of potentially viable Sick CPSUs. In view of huge joblosses and mounting unemployment problem, the ban on recruitment in Govt. deptts, PSUs and autonomous institutions (including recent Finance Ministry’s instruction to abolish those posts not filled for one year) should be lifted as recommended by 43rd Session of Indian Labour Conference. Condition of surrender of posts in govt. departments and PSUs should be scrapped and new posts be created keeping in view the new work and increased workload. Proper allocation of funds be also made for interim relief and 7th Pay Commission. The scope of MGNREGA be extended to agriculture operations and employment for minimum period of 200 days with guaranteed statutory wage be provided, as unanimously recommended by 43rd Session of Indian Labour Conference. The massive workforce engaged in ICDS, Mid-day meal scheme, Vidya volunteers, Guest Teachers, Siksha Mitra, the workers engaged in the Accredited Social Health Activities (ASHA) and other schemes be regularized. No to privatization of centrally funded schemes. Universalisation of ICDS be done as per Supreme Court directions by making adequate budgetary allocations. Steps be taken for removal of all restrictive provisions based on poverty line in respect of eligibility coverage of the schemes under the Unorganised Workers Social Security Act 2008 and allocation of adequate resources for the National Fund for Unorganised Workers to provide for Social Security to all unorganized workers including the contract/casual and migrant workers in line with the recommendations of Parliamentary Standing Committee on Labour and also the 43rd Session of Indian Labour Conference. The word BPL redefined and redistributed at the earliest. Remunerative Prices should be ensured for the agricultural produce and Govt. investment public investment in agriculture sector must be substantially augmented as a proportion of GDP and total budgetary expenditure. It should also be ensured that benefits of the increase reach the small, marginal and medium cultivators only; Budgetary provision should be made for providing essential services including housing, public transport, sanitation, water, schools, crèche health care etc. to workers in the new emerging industrial areas. Working women’s hostels should be set up where there is a concentration of women workers. Requisite budgetary support for addressing crisis in traditional sectors like Jute, Textiles, Plantation, Handloom, Carpet and Coir etc. Budgetary provision for elementary education should be increased, particularly in the context of the implementation of the ‘Right to Education’ as this is the most effective tool to combat child labour. The system of computation of Consumer Price Index should be reviewed as the present index is causing heavy financial loss to the workers. Income Tax exemption ceiling for the salaried persons should be raised to Rs.5 lakh per annum and fringe benefits like housing, medical and educational facilities and running allowances should be exempted from the income tax net in totality. Threshold limit of 20 employees in EPF Scheme be brought down to 10 as recommended by CBT-EPF. Pension benefits under EPS unilaterally withdrawn by the Govt. should be restored. Govt. and Employers contribution be increased to allow sustainability of Employees Pension Scheme and for provision of minimum pension of Rs.3000/- p.m. New Pension Scheme be withdrawn and newly recruited employees of central and state govts on or after 1.1.2004 be covered under Old Pension Scheme; Demand for Dearness Allowance merger by Central Govt. and PSUs employees be accepted and adequate allocation of fund for this be made in the budget; All interests and social security of the domestic workers to be statutorily protected on the lines of the ILO Convention on domestic workers. The Cess Management of the construction workers is the responsibility of the Finance Ministry under the Act and the several irregularities found in collection of cess be rectified as well as their proper utilization must be ensured. In regard to resource mobilization, we would like to emphasize the following: A progressive taxation system should be put in place to ensure taxing the rich and the affluent sections who have the capacity to pay at a higher degree. The corporate service sector, traders, wholesale business, private hospitals and institutions etc. should be brought under broader and higher tax net. Increase taxes on luxury goods and reduce indirect taxes on essential commodities as at present the overwhelming majority of the populations are subjected to Indirect taxes that constitute 86% of the revenue. Concrete steps must be taken to recover huge accumulated unpaid tax arrears which has already crossed more than Rs.5 lakh crore on direct and corporate tax account alone, and has been increasing at a geometric proportion. Such huge tax-evasion over and above the liberal tax concessions already given in the last two budgets should not be allowed to continue. We welcome the constituted of SIT for black money and urge for speedy action. Effective measures should be taken to unearth huge accumulation of black money in the economy including the huge unaccounted money in tax heavens abroad and within the country. Finance Minister should make provisions to bring back the illicit flows from India which are at present more than twice the current external debt of US $ 230 billion. This money should be directed towards providing social security. Concrete measures be expedited for recovering the NPAs of the banking system from the willfully defaulting corporate and business houses. By making provision in Banking Regulations Act, CMDs and Executives to be made accountable for creation of NPAs. Tax on Long term capital gains to be introduced; so also higher taxes on the security transactions to be levied. The rate of wealth tax, corporate tax, gift tax etc. to be expanded and enhanced. ITES, outsourcing sector, Educational Institutions and Health Services etc. run on commercial basis should be brought under Service Tax net. Govt. Small saving instruments under postal and other agencies be encouraged by incentivizing commission agents of these scheme OUR SERIOUS CONCERN: We would like to express our strong resentment that the previous Govt. failed to positively respond to the collective voice of the Central Trade Unions on the very important issues concerning the working people of India, both organized and unorganized, consistently repeated in the form of a ‘10 point charter’ backed by several collective nationwide programmes. We expect that this Govt. will take initiative to discuss these issues with the Central Trade Unions in order to find a solution. We also express our opposition to the so called Banking Reforms encouraging private sector/capitalists banking at the cost of public sector banks which saved the economy to an extent during the last global financial meltdown. Several such measures against the working men and women in this country including anti workers proposals contained in the New Manufacturing Policy have our strong opposition, as in our experience these kinds of measures have helped the growth of only a small section of the capitalists while the larger sections of the working population continue to be marginalized and impoverished. POST BUDGET MEETING WITH TRADE UNIONS Successive Finance Ministers have agreed to hold post budget meetings / consultations with the central trade unions. However, it has not been materialized except for one occasion. We understand such meetings did take place with the Corporate Associations/Employers Federations. We would like to importunate upon you to arrange such post budget meeting with trade unions also. With regards, Yours sincerely, BMS INTUC AITUC HMS CITU AIUTUC TUCC SEWA AICCTU UTUC LPF Source: http://www.bms.org.in

Press Information Bureau News in this regard:-

Press Information Bureau  Government of India Ministry of Finance  06-June-2014 15:31 IST  Union Finance Minister Holds Pre-Budget Consultation Meeting With the Representatives of Trade Union Groups; Skill Development to be Given Priority for Generating Employment Oppurtunities   The Union Finance Minister Shri Arun Jaitley said that skill development would be given priority so that more and more trained workers join the Indian economy. He said that the Government will give due consideration to the Ten Point Joint Charter of Demands given by the Central Trade Unions while formulating the budgetary proposals. The Finance Minister was speaking here today while interacting with the representatives of the Central Trade Unions as part of his Pre-Budget Consultation meetings.  Along with the Finance Minister, the meeting was attended by Ms. Nirmala Sitharaman, Minister of State for Finance and Corporate Affairs, Shri Ratan P. Watal, Expenditure Secretary, Shri Rajiv Takru, Revenue Secretary, Smt. Gauri Kumar, Secretary, Ministry of Labour and Employment and senior officers of the Ministry of Finance among others.  The participating Central Trade Unions gave a joint memorandum to the Finance Minister for his consideration and positive response. Some of the specific proposals contained there in are given below:  Take effective measures to arrest the spiraling price rise and to contain inflation; Ban speculative forward trading in commodities; universalize and strengthen the Public Distribution System(PDS); ensure proper check on hoarding; rationalize, with a view to reduce the burden on people, the tax/duty/cess on petroleum products.  Massive investment in the infrastructure in order to stimulate the economy for job creation. Public Sector should take the leading role in this regard. The plan and non-plan expenditure should be increased in the budget to stimulate jobs creation and guarantee consistent income to people.  Minimum wage linked to  Consumer Price Index (CPI) must be guaranteed to all workers, taking into consideration the recommendations of the 15th Indian Labour Conference . It should not be less than Rs. 15,000/- p.m.  FDI should not be allowed in crucial sectors like defence production, telecommunications, railways, financial sector, retail trade, education, health and media.  The Public Sector Units (PSUs) played a crucial role during the year of severe contraction of private capital investment immediately following the outbreak of global financial crisis. PSUs should be strengthened and expanded. Disinvestment of shares of profit making public sector units should be stopped forthwith. Budgetary support should be given for revival of potentially viable sick CPSUs.  In view of huge job losses and mounting unemployment problem, the ban on recruitment in Government departments, PSUs and autonomous institutions (including recent Finance Ministry’s instruction to abolish those posts not filled for one year) should be lifted as recommended by 43rd Session of Indian Labour Conference. Condition of surrender of posts in government departments and PSUs should be scrapped and new posts be created keeping in view the new work and increased workload.   Proper allocation of funds be made for interim relief and 7th Pay Commission.  The scope of MGNREGA be extended to agriculture operations and employment for minimum period of 200 days with guaranteed statutory wage be provided, as unanimously recommended by 43rd Session of Indian Labour Conference.  The massive workforce engaged in ICDS, Mid Day Meal Scheme, Vidya volunteers, guest teachers, Siksha Mitra, the workers engaged in the Accredited Social Health Activities (ASHA) and other schemes be regularized. No to privatization of centrally funded schemes. Universalization of ICDS be done as per Supreme Court directions by making adequate budgetary allocations.  Steps be taken for removal of all restrictive provisions based on poverty line in respect of eligibility coverage of the schemes under the Unorganized Workers Social Security Act 2008 and allocation of adequate resources for the National Fund for Unorganised Workers to provide for social security to all unorganised workers including the contract/casual and migrant workers in line with the recommendations of the Parliamentary Standing Committee on Labour and also the 43rd Session of Indian Labour Conference. The word BPL redefined and redistributed at the earliest.  Remunerative prices should be ensured for agricultural produce and Government investment, public investment in agriculture sector must be substantially augmented as a proportion of GDP and total budgetary expenditure. It should also be ensured that benefits of the increase reach the small, marginal and medium cultivators only.  Budgetary provision should be made for providing essential services including housing, public transport, sanitation, water, schools, crèche, health care etc, to workers in the new emerging industrial areas. Working women’s Hostels should be set-up where there is a concentration of women workers.  Requisite budgetary support for addressing crisis in traditional sectors like jute, textiles, plantation, handloom, carpet and coir etc.  Budgetary provision for elementary education should be increased, particularly in the context of the implementation of the ‘Right to Education’ as this is the most effective tool to combat child labour.  The system of computation of  Consumer Price Index (CPI) should be reviewed as the present index is causing heavy financial loss to the workers.  Income tax exemption ceiling for the salaried persons should be raised to Rs. 5.00 lakh per annum and fringe benefits like housing, medical and educational facilities and running allowances should be exempted from income tax net in totality.  Threshold limit of 20 employees in EPF Scheme be brought down to 10 as recommended by CBT-EPF.  Pension benefits under the EPS unilaterally withdrawn by the Government should be restored. Government and employers contribution be increased to allow sustainability of Employees Pension Scheme and for provision of minimum pension of Rs. 3000/- p.m.  New Pension Scheme be withdrawn and newly recruited employees of Central And State Governments on or after 1.1.2004 be covered under Old Pension Scheme;   Demand for Dearness Allowance merger by Central Government and PSU employees be accepted and adequate allocation of fund for this be made in the budget.  All interests and social security of the domestic workers to be statutorily protected on the lines of ILO Convention on domestic workers.  The Cess management of the construction workers is the responsibility of the Finance Ministry under the Ac t and the several irregularities found in collection of cess be rectified as well as their proper utilization must be ensured. In regard to resource mobilization, the Trade Unions have emphasized on the following:  A progressive taxation system should be put in place to ensure taxing the rich and the affluent sections who have the capacity to pay at a higher degree. The corporate service sector, traders, wholesale business, private hospitals and institutions etc should be brought under broader and higher tax net. Increase taxes on luxury goods and reduce indirect taxes on essential commodities.  Concrete steps must be taken to recover huge accumulated unpaid tax arrears which has already crossed more than Rs. 5.00 lakh crore on direct and  corporate tax account alone, and has been increasing at a geometric proportion. Such huge tax evasion over and above the liberal tax concessions already given in the last two budgets should not be allowed to continue.  We welcome the constitution of SIT for black money and urge for speedy action.  Effective measures should be taken to unearth huge accumulation of black money in the economy including the huge unaccounted money in tax heavens abroad and within the country. Provisions be made to bring back the illicit flows from India which are at present more than twice the current external debt of US $ 230 billion. This money should be directed towards providing social security.   Concrete measures be expedited for recovering the NPAs of the banking system from the willfully defaulting corporate and business houses. By making provision in Banking Regulations Act, CMDs and executives to be made accountable for creation of NPAs.  Tax on long term capital gains to be introduced, so also higher taxes on the security transactions to be levied.  The rate of wealth tax,  corporate tax, gift tax etc to be expanded and enhanced.  ITES, outsourcing sector, educational institutions and health services etc run on commercial basis should be brought under the Service Tax net.  Small saving instruments under postal and other agencies be encouraged by incentivizing commission agents of these scheme. Other suggestions include holding of post budget consultations with the representatives of Central Trade Unions, need for directional change in policies such as stopping of mindless deregulation, encourage entrepreneurship to tackle problem of unemployment, more spending on education and skill development, removal of ceiling on gratuity, bonus and pension etc of workers and following the principle of “Same work, same wages” among others. Representatives of different Central Trade Union groups who participated in today’s meeting included Shri B.N. Rai, Bhartiya Mazdoor Sangh (BMS), Shri Chandra Prakash Singh, Indian National Trade Union Congress (INTUC), Shri Shanta Kumar, INTUC, Ms Amarjeet Kaur, Indian National Trade Union Congress (INTUC), Shri D.L. Sachdeva, Indian National Trade Union Congress (INTUC), Shri Sharad Rao, Hind Mazdoor Sabha (HMS), Shri Harbhajan Singh Sidhu, Hind Mazdoor Sabha (HMS), Shri Swadesh Devroye, Centre of Indian Trade Unions (CITU), Shri Tapan Sen, MP (RS), Centre of Indian Trade Unions (CITU), Shri Dilip Bhattacharya, All India United Trade Union Centre (AIUTUC), Shri Sankar Saha, All India United Trade Union Centre (AIUTUC), Shri Sheo Prasad Tiwari, Trade Union Coordination Centre (TUCC), Shri V.Suburaman, Labour Progressive Federation (LPF), Shri M. Shanmugum, LPF, Shri Prechandan, United Trade Union Congress (UTUC), Shri Abni Roy, United Trade Union Congress (UTUC) and Dr. Virat Jaiswal, National Front of Indian Trade Unions among others. Source: PIB

Courtesy  : http://karnmk.blogspot.in/

Gazetted officer’s attestation no longer required

Gazetted officer’s attestation no longer required 

 

You may no longer need a gazetted officer or a magistrate to attest documents sought by government departments. Prime Minister Narendra Modi has asked his bureaucrats to repeal all laws and rules which come in the way of effective governance. 

In a meeting with secretaries on Wednesday, the PM suggested government departments should adopt the system of self-attestation of certificates, photographs and marksheets, instead of asking for attested documents or filing of affidavits. He also told officials all government application forms should be made short and simple by doing away with unnecessary fields.

“The prime minister said self attestation should be enough because it is a hassle for the common man to get it attested from gazetted officers. Anyway, the original documents are required to be produced at the final stage,” a senior government official told Business Standard.

Obtaining either an attested copy or affidavit not only costs money but also leads to wastage of time for government officials as well as citizens, including students, job applicants and beneficiaries of various government schemes. Attestation by gazetted officers is required at many places such as applying for a ‘tatkal’ passport, admission in a central or state university or a government job.

The Second Administrative Reforms Commission, in its report in 2009, recommended the adoption of the self-certification provision to simplify procedures. Taking a cue from this, the Ministry of Personnel, Public Grievances and Pensions issued a circular last year, and some departments and state governments such as Gujarat and Goa had adopted it. But it has not been fully enforced at all levels.

The prime minister, who keeps himself updated with the day's news on an iPad and clicks selfies with his smartphone, told bureaucrats that rules and by-laws which hamper the effective use of technology should also be done away with. He asked them to use technology such as internal emails and intranet in a big way.

Another official said Modi was critical of the archaic rules and by-laws which govern the country's law and order departments, and shared anecdotes on how some of those were done away with in Gujarat.

Sources said flying balloons near border areas was prohibited by law because during World War II, because they were used to transmit messages. The provision remained even decades after India’s independence, till Modi took over as chief minister of Gujarat, the sources added.

The Prime Minister has directed his officers to identify 10 rules and regulations which can be scrapped or revisited to make them more effective in today’s environment. He has directed officers to prepare a dossier of such rules and by-laws and present them for review.

He also said rules regarding transfer and postings of officers needed to be changed to ensure there was continuity of service. The Prime Minister added those who are underperforming could lose their promotion prospects.

“The PM said ‘I don’t believe in transfers. Even if a guy doesn’t perform I have to think 15 times what to do with him because I am not transferring a person, I am transferring a problem’,” said another official.

SIMPLIFYING THE PROCESS

• Prime Minister Narendra Modi has asked bureaucrats to repeal all laws and rules which come in the way of effective governance. A look at what is planned:
• The PM has suggested government departments to do away with attestation of certificates by gazetted officers; instead, documents should be self-attested. Original documents, in any case, are required to be produced in the final stages of any government work, bureaucrats said
• He has suggested to bureaucrats technology should be adopted in a big way. All rules and by-laws, which hamper the effective use of technology, should be done away with, the PM has suggested
• Modi has directed officers to identify 10 rules that can be scrapped or revisited, to make them more effective in current times. Officers are supposed to prepare a dossier of such rules and present them for review
• He has proposed rules regarding the transfer and postings of officers be changed to ensure continuity of service

Source : http://www.business-standard.com/

 

FinMin nixes India Post's plan to set up a bank

Tells RBI this is not the time to consider such a foray, especially given the lack of funds to spare for such a venture

The Union finance ministry has poured cold water on India Post's application to set up a bank. The postal department might be asked to re-apply when new guidelines for bank licences are issued by the Reserve Bank of India (RBI).

As suggested by the Bimal Jalan-headed screening committee, the issue came up for discussion at a recent meeting of the finance ministry and RBI, a ministry official said. The ministry said India Post was not ready for a banking foray.

India Post had said it needed Rs 1,800 crore to set up the bank. The postal department had sought an initial capital of Rs 623 crore from the finance ministry. It had thought of raising the rest from other sources. 

NO BANKING JOB FOR THE POSTMAN

·     Finance ministry says India Post is not ready for a banking foray ·     India Post had said it needed Rs 1,800 crore to set up the bank ·     The postal department had sought an initial capital of Rs 623 crore from the finance ministry ·     The advantage with India Post for getting a banking licence is that it has a branch in every nook and corner of the country ·     India Post has deposits of Rs 4 lakh crore but doesn't have experience in handling advances

"When we don't have enough money to recapitalise existing public sector banks, how can we afford to give funds for a new government bank?" said the official.
RBI had granted licences to only two entities, IDFC and Bandhan Financial Services, of the 25 applicants which applied to set up a bank. 
The high-level advisory committee (Jalan panel) set up by RBI to look into the bank licence applications had recommended the central bank consider India Post's application separately, in consultation with the government, and RBI had agreed to do so. 
RBI had also said that instead of only opening the licensing window periodically, it would like to make it a regular process, also mooting the idea of differentiated licences. 
Officials said RBI might issue new guidelines with some modifications for on-tap and differentiated licences. Then, India Post could stand a chance, particularly as a deposit-taking bank, provided it addressed the concerns of all stakeholders, they added. 
The advantage with India Post is that it has a branch in every nook and corner of the country. So, it can help the government reach the objective of financial inclusion. 
"India Post deserves the licence because they have the ability to attract customers, the first step towards financial inclusion. It is easier to lend but difficult to get deposits," said Abizer Diwanji, partner and national leader-financial services, EY. 
While India Post has deposits of Rs 4 lakh crore, it doesn't have experience in handling advances. It has a huge workforce but lacks experience in the range of banking operations, particularly treasury and risk management. Thus, it will have to get talent from the market, while some from its existing staff of 474,000 might be redundant.
India has the largest postal network in the world, with 155,015 post offices (against 98,000 bank branches), of which 90 per cent are in rural areas. However, the department posted a loss of Rs 5,805 crore in 2011-12. Both Bandhan and IDFC, on the other hand, are profitable. 

Source : http://www.business-standard.com/article/finance/finmin-nixes-india-post-s-plan-to-set-up-a-bank-114050900172_1.html

Best wishes for May day

Dear Comrades,

We are happy to inform that our Circle Secretary comrade J.Ramamoorthy hoisting the flag for May day celebration at Chennai GPO around 1100 hours.

Best wishes to comrades for May day