Post: India Post: Thinking Out Of The Box [Pg. 2]

[Contn.]
India Post: Thinking Out Of The Box

The Largest Savings Bank

B.N. Som (Centre), Director General, India Post, with his team
Thanks to Som's efforts, the department of post has grown, on an average, by 37 per cent over the past three years, and in 2000-1, clocked revenues of rs 3,182 crore

The financial services group is headed by the 41-year-old Director (Savings Bank), A.P. Singh, and is involved in the development of a range of products. These include instant money transfer in collaboration with Western Union Financial Services, distribution of mutual fund units (via tie-ups with IDBI Principal, Prudential ICICI and SBI Mutual), card-based payment solutions for which a memorandum of understanding has been signed with Mastercard, and the expansion of the savings bank operations. Says Singh: ''Financial services today contribute 30-40 per cent of revenues at 'healthy' post offices globally.''

Today, the postal bank is the country's largest savings bank with 110 million customers who invested a whopping Rs 1,67,000 crore last year across more than 1.5 lakh post offices countrywide. Banking is serious business for the financial services group.

The private banks and MNCs may have the technology, but they have neither the network nor the reach of the postal department. So the group plans to synergise reach and technology to provide total banking solutions. Says Singh: ''Banks can join us with an initial entry fee, and in future, the transaction cost will be shared.'' India Post is perhaps taking a cue from the Dutch postal service that hived off its savings bank business and sold it to ING Barings. The Dutch post office is now a minority stakeholder in the savings bank and gets an annual franchisee fee.

The postal department also aims at providing cash management services to banks. For example, if a company has several C&F agents all over the country who have to remit money to a common account, it takes terribly long. The company has to collect cheques from as many agents. So, the department has tied up with a number of the country's clearing houses and will mainly be instrumental in sweeping the smaller amounts into a designated account.

CAN INDIA POST DO A US POST?
The USPS is today a monolith, a maverick, and a model for postal institutions, the world over.
Here's how.

When Benjamin Franklin became the first Postmaster General of the US postal network in 1775, the Congress was fighting tooth-and-nail to bind a weak confederation of colonies along the eastern seaboard. The Congress saw the postal system as a glue that would cement an emerging nation, support commerce and allow the free flow of ideas and information.

More than two centuries have lapsed since then. Today, the US and its postal service have grown and changed together with the country emerging as the world's foremost economy and its postal network ranked 26 in the Fortune Global 500 list of companies with $65 billion in sales. In fact, the service is the 8th largest company in the US in terms of sales. Today, the USPS employs 780,000 career employees and 115,000 non-career staff, making it the second largest employer in the United States (behind Wal-Mart). The average salary of the workforce hovers around $40,000 per annum with pension and health insurance coverage.

The USPS has more than 38,000 post offices and outlets where each day, more than 7 million Americans drop in for transactions worth more $200 million. But despite that, the USPS has come in for criticism in recent years, especially for diverisfying into areas like smart cards, calling cards, and the sale of ties and t-shirts.

That could have prompted the US' 72nd Post Master General John Potter to utter those magic words soon after he took over in June this year: ''We're going to be all about core.''

''As of now, it takes 7-14 days for clearing from remote areas. When the service becomes operational, real-time transactions will set in and funds swept by this process will alone account for Rs 1,50,000 crore every year,'' says A.P. Singh. Besides, the department will now promote single-window services with banks wherein the customer benefits by getting loans directly from the post office. ''Subsequently, we'll move on to personal finance,'' promises Singh. India Post is also keen to deploy its own ATM network and eventually become the single largest ATM network provider in the country.

As technology forms the backbone of the new initiatives the Department has on offer, the process of computerising post offices is gathering steam. In 1998-99, 100 post offices were fully computerised; today that figure has grown four-fold. And 1,200 post offices have been partially computerised. Moreover, in 1995, the Department started inducting V-SATs to post offices and by 1995-96, 77 v-sat stations were transmitting money orders on fee. In 1998, India Post started a high-speed network and went in for 64 kbps stations instead of the prevailing 1-9 kbps stations. Today, there are 150 v-sat stations linked to 1,400 post offices. Says V. Sadashivam, DDG (Technology): ''Our immediate aim is to computerise at least 16,000 post offices and link them through the internet and these 16,000 pos will account for almost 90 per cent of our traffic.''

The 50-year-old lanky colonel has a twinkle in his eyes while explaining the Department's epost venture. He claims that epost is India Post's first web-based application and ''anybody can avail this product to send email''. For this, one has only to log on to a website (www.indianpostoffice.net) and register. Thereafter, he gets a free email id.

To use epost, he has to produce advance credit and pay through his credit card or through the epost card-a pre-paid card available in denominations from Rs 250 to Rs 10,000 in 400 post offices across the country. The user has to simply key in his letter and provide a geographical address. At other end, the letter is printed out and is picked up by the post office man, who distributes it to the stated address. After distribution, the date of delivery is e-mailed to the user for the convenience of tracking. epost has so far been launched in five states (Andhra Pradesh, Gujarat, Goa, Maharashtra, and Kerala). It boasts a system that also allows people to scan and send their messages online to retain originality.

The Department is also contemplating a bill collection network, which will ensure that all utility bills are settled under one roof, namely, the post office.

Meanwhile in Mumbai, the automatic mail processing system is the pride and joy of Harish Agrawal, Director of Mumbai's General Post Office. Imported at a cost of Rs 20 crore from Belgium, the processing system sorts though 30,000 unregistered letters in an hour and slots them into 200 different bundles. Explains the bespectacled 39-year-old Agrawal: ''Let's say there's mail for Delhi which has 80 different delivery post offices. The operator types in the pin code which instantly gets converted into a bar code, which gets printed on the bottom of the letter. The machine then scans the bar code and we're able to churn out 'ready to deliver' bundles for each post office in a fraction of the original time.'' The old manual system could only process 1,000 letters per hour.

The M. Tech from IIT, Delhi, and Indian Postal Service officer from the 1988 batch, is equally excited about the ''Track and Trace'' system introduced last month on the Speed Post network, dubbed Speednet. Each Speed Post package is assigned a unique identification number when it is booked. By logging on to the Department's website and using this number, customers can at any point monitor the exact location of the consignment. Information from various Speed Post centres across the country is routinely updated on to the central server in Hyderabad.

There are 6,09,000 people working for the Department of Post out of which 2,72,000 are regular employees. John Samuel points out that the various postal unions are in agreement with the current management practices and ''there is little hindrance on the road to modernisation''. Most of the staff is re-skilled in five regional training centres-Ghaziabad, Saharanpur, Darbhanga, Vadodara and Madurai-that comply with the current tech-oriented thrust of the Department.

But Samuel recognises that cascading the vision of the top management down the line will be extremely difficult with such a vast workforce. Changing mindsets will take uncannily long too. He also says that the Department should by now be given independent charge, somewhat like the Bharat Sanchar Nigam Limited (BSNL) and other telecom bodies-a view even echoed by the minister. Says Sikdar, ''The postal department's funding decisions lie with the Planning Commission and the funds are released by the Finance Ministry.'' In short, the Department should be allowed to make independent decisions and find its own source of funding. Amen.

-additional reporting by Abir Pal

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