India Post to Flourish with Modern Technology; World is Looking to It

Over the years, India Post has seen a large chunk of its business—both in postage stamps and parcels—disappear as people opted for the convenience offered by courier service companies. Now, as it gets ready to launch its payment bank by March 2017, the monolith is taking steps to become a truly digital organisation. That is critical for its future survival.

India Post’s prospects seem to have got a boost with the payments bank licence it got in August 2015—at least 23 agencies have approached it to join hands for the venture. Much of the change at India Post over the next few months will be technology-driven.

As a first step, 12,000 of its 1.55 lakh post offices have been now made core-banking enabled. That number should double, to almost 25,000, by March 2016. By then, it also plans to have 1,000 ATMs in place. Hooking up the major post offices to one network along with ATMs will help the postal department provide the flexibility that public sector banks already offer to customers.

The next step on the digital highway for India Post is to provide 1.3 lakh global positioning system (GPS) enabled hand-held devices to postmasters across the country by March 2017. These devices will facilitate biometric authentication of social security beneficiaries at the time of pay-out, reducing leakages.

Since the majority of these devices will be deployed in small towns and rural India, it will help India Post to cash in on the rising demand for e-commerce services in those regions. Already, the postal department has a distinct rural advantage since close to 90% (1.39 lakh) of the total post offices in the country are in rural India. Yet, India Post has not yet taken advantage of its huge hinterland presence.

During 2014-15, cash-on-delivery from e-commerce services earned India Post Rs 980 crore. As more devices are deployed over the next few months, the earnings from the delivery of goods for e-commerce companies in smaller towns and villages would rise substantially, apart from providing a greater degree of confidence to consumers. The increased earnings from rural India could add cheer to India Post.

Source Post Bank Of India