Post offices moved a step closer to becoming banks. The government has allowed certain eligible branches to issue ATM cards to their account holders and also account statements instead of giving out passbooks, as most private sector banks do.
On Tuesday, the government issued a gazette notification amending the Post Office Savings Bank General Rules, 1981. The rules will come into force immediately. These facilities will be available to the branches that are working on core banking solution software, essentially branches that part of an electronic network.
Post offices currently provide savings account, recurring deposits, fixed deposits and many other small savings schemes run by the government including the popular Public Provident Funds.
The funds raised by them largely go to finance central and state governments. India post currently has about 1.55 lakh branches, nearly 90% are in the rural areas, which many experts see as a good vehicle for financial inclusion. The notification says the post office savings bank could issue automated teller machine or debit card to account holders on request or otherwise which can be used to withdraw funds from any of the branches having core banking.
The deposits to these accounts could be made and accepted through any electronic mode. The RBI had decided against issuing a banking licence to India Post when it gave out licence to IDFC and Bandhan Financial Services saying it would decide after consultation with government. The new rules notified by the government will push India Post closer to banks.
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