POSB IPPB Merger | Stop proposed merger of POSB (Post Office Savings Bank) with IPPB (India Post Payments Bank) | An Article By B Samal
Stop proposed merger of POSB with IPPB. As it’s a threat to Post Office small savings scheme (POSB) or National Small Savings Schemes (NSSS).
Since establishment of India Post Payments Bank Limited (IPPB) on September 1st 2018, as the first PSU under the Department of Posts (Dop) as policy of dual structure, while IPPB habsbeen contributing is technalogical process in heping modernise products DOP in ine with banking products of DoP extending the support of its massive and unmatched distribution network in creating a unifed one-stop platform for delivering various Government-to citizen services.
But with a view to avoid the dual structure and to keep only single IPPB structure to be used for banking, insurance and other financal service provided by India Post so far the Cabinet approved the IT Modernisation Project 2.0 of the DoP on January 19 2022 for an outlay of Rs 5,785 crore to be incurred for a period of eight years from 2022-23 to 2029-30 with key decisions that the core postal operations namely postal and point of sale, accounting, field network back office management and postal hardware will be the domain of DoP.
as DOP Track and rest operations, ViZ: banking and Insurance, rural hand were devices. IT infra fraud and risk management will be merged with IPPB as IPPB Track Thus, the National Small Savings Scheme (NSSS) operated in 1.57 lakh Post Offices as Post Office Small Savings Scheme (POSSS) since 1842, the Postal Life Insurance (PLI) since 1884 and other financial products and services introduced by DoP subsequently since promulgation of Indian Post Office Act, 1854 will now lose their existences after merger with IPPB
While the POSB Account offers Interest @ 4% per annum for deposits without any upper limit and free of service charges, the IPPB Account offers interest @ 2.00% and @ 2.25% per annum on balance upto Rs 1 lakh and for Incremental balances above Rs 1 lakh and up to Re 2 lakh respectively. In addition all the facilities like Door Step Banking (DSB), cash depots, withdrawals and mini statements beyond three free transactions a month, digital SB Account closure, fund transfer, standing instruction, POSB sweep - in and sweep-out , payment for DoP products (SSA, PPF, RD), mobile postpaid, bills payment, AEPS transactions, annual mainntenance and re-issauance of virtual debit card etc are also chargeable by IPPB for which customers are not showing that much of aterest and the very purpose of its execution has been defeated with minus balance of Rs 8,21,43,93,936 in the Annual Profit Loss Account of IPPB for the year ending March 31,2021
While IPPB is functioning in the rent fee building provided by DoP including water and electricity and maximum DoP employees are working in IPPB on Deputation, Iyt has unnecessarily thrown a burden f more than RS 821 crore on DoP in just 30 months Further, the IPPB is also creating confusion amongst the esteemed customers of PLI when it campaigns for Bajaj Allains Lite POS Goal Suraksha on behalf of DOP There should not be conflict, interest with PLI being the oldest insurance in the county with Low Premium, High Bonus and having access to each individual citizen through Rural Postal Life insurance.
With varity of products viz Time Deport Account (1-year,2- year, 3 year and 5-year) Recuring Deposit Account, Public Provident Fund Account, Monthly Income Scheme Account, Senior Citizen Savings Scheme Account and Sukanya Samridhl Account, National Savings Certificates and kisan Vikash Patra, DoP operates POSB Schemes on behalf of Ministry of Finance, Government of India and earns nearly 64% of its income from NSSS. Easy and acceptable methods of opening of account, subsequent deposit. withdrawal, closure, transfer and above all, satisfactory rates of interest in comparision to banks and ther financial institutions attracted the members of public towards POSSS.
As on 31.03 2021, the total oumber of Accounts under NSSS i.e 290,387,767 with outstanding balance of Rs 96,9,136,17 crore
Since out of 1.57 lakh post offices, 130 lakhs are in rural areas,the investors of POSSS are mainly rural poor belonging to economicaly weaker section of the society Their hard earned money in quite safe and secured under POSSS
providing good amount of returns, it may not be a wise decision for forcefull merger of their deposits with a loss making banking orginzaton in the name of IPPB Ltd which is just a payment bank and not ful-fledged In case it goes bankrupt, the depositor is only entitled for Re 5 lakh only as per the threshold Limit fixed by RBI Deposit Insurance and Credit Guarantee Corporation. But that apprehension is not at all there under POSS. To protect theInterest of 30 crores investor and their 10 lakh crore invest under POSSS, the Government need to stop the proposed merger of POSB with IPPB
(The writer is former National General seretary (PIII), National Federation of Postal Employees (NFPE)
bsamalbbsr@gmailcom: MoB: 9437022659)
