Expression of Interest from the Bidders to Create Post Bank Of India

Postal department invited Expression of Interest from the Bidders to submit detailed Project report to Create Post Bank Of India. The last date for submitting the applications are 24/05/2012 and the bids will be opened on 25/05/2012. In the tender document it is clearly mentioned the objectives for setting up the Post Bank Of India are as follows:

(i) Provide banking which means the accepting, for the purpose of lending or investment, of deposit of money from the public, repayable on demand or otherwise, and withdrawal by Cheque, draft, order or otherwise. PBI will be engaged in various types of banking as mentioned in Section 6 of the Banking Regulation Act, 1949.

(ii) Provide banking services with special focus on rural areas.

(iii) Provide means of additional revenue generation for the DoP.

(iv) Ride on the Core Banking Solution which is proposed to be provided in all the post offices.

(v) Provide a platform for financial inclusion.

(vi) Provide higher order value added services to over 250 Million existing Post Office Savings Bank account holders.

The Department of Posts has been accepting deposits and making payments to its customers for past more than 100 years. It has a customer base of more than 250 million account holders as on 31.12.2011. Savings Bank facilities are provided through a network of about more than 1.54 lakh post offices across the country, out of which 25, 000 post offices are fully computerized and Savings Bank work is being carried out in Local Area Network (LAN) environment in 11000 post offices.

The banking sector in India has so far not been able to provide complete coverage in the country especially in the rural areas. There are 171 commercial banks in the country as on 31st March 2011. Out of the 93,080 Commercial Banks’ branches only 36.10% are in rural areas and 24.76% in semi-urban areas. All India average population served per branch is 13,503 (as on 31 March 2011). On the other hand, out of 1.55 lakhs Post offices, 89.8% i.e. 1.39 lakhs are in rural areas covering an average population of 5992 per Post office (as on March 2011). Further, only 5% of 6 lakhs villages have bank branches. Two hundred ninety six (296) districts in states are underbanked, i.e. they have below-par banking services. The Government’s financial inclusion plan aims to provide banking services to 73,000 villages each having a population of 2000. This could be effectively and adequately provided by the PBI operating through postal network and thereby help to spread the savings habit. Thus setting up of PBI will assist the Government in its plan for financial inclusion besides mobilizing deposits, especially in the under- served rural and semi-urban areas of the country.

Two committees on Post Bank of India (PBI) were constituted in 2005 & 2006 respectively which submitted its report on feasibility of setting up of PBI. Thereafter, one feasibility study was carried out in February 2011 which opined that there is a prima facie case for creation of the Post Bank of India. Issues such as ascertaining the financial viability, whether Post Office Small Savings Schemes and Post Bank should co-exist or operate individually, provision of seed money for PBI, organizational structure of PBI, PBI’s relationship with Post Office etc. were raised in these reports and they need to be addressed. Therefore, a “Detailed Project Report (DPR) for creation of the Post Bank of India (PBI)” which will address all the issues (proposed to be highlighted in the Terms of Reference of the RFP) and also other related aspects is required to be carried out. As a next logical step this EOI is issued to ascertain & bring out the financial viability, justification and other related aspects to achieve the objective of creation of the Post Bank of India.

Source: Indiapost.gov.in