PROJECT REPORT ON

POSTAL DEPOSIT SCHEMES SWOT ANALYSIS

Submitted to
University of Mumbai
In Partial Fulfillment Of The Requirement
For
M.Com (Accountancy) Semester III
In the subject
RESEARCH METHODOLOGY

By
Name of the student
Roll No.

::-

Ashwini Anil Munj

15-9677

Name and address of the college

K. V. Pendharkar College
Of Arts, Science & Commerce
Dombivli (E), 421203
OCTOBER 2015

DECLARATION

I ASHWINI ANIL MUNJ Roll No. 15-9677, the student of M.Com

(Accountancy) Semester III (2015), K. V. Pendharkar College, Dombivli,
Affiliated to University of Mumbai, hereby declare that the project for the
subject Strategic Management of Project report on POSTAL DEPOSIT
SCHEMES SWOT ANALYSIS submitted by me to University of
Mumbai, for semester III examination is based on actual work carried by
me.
I further state that this work is original and not submitted anywhere else for
any examination.
Place : Dombivli
Date: -

Signature of the Student

Name: - ASHWINI ANIL MUNJ

Roll No:- 15-9677

ACKNOWLEDGEMENT
It is a pleasure to thank all those who made this project work possible.
I Thank the Almighty God for his blessings in completing this task. The
successful completion of this project is possible only due to support and
cooperation of my teachers, relatives, friends and well-wishers. I would like
to extend my sincere gratitude to all of them.
I am highly indebted to Principal
, Co-ordinator
, and my subject teacher
_______________________ for their encouragement, guidance and support.
I also take this opportunity to express sense of gratitude to my parents for
their support and co-operation in completing this project.
Finally I would express my gratitude to all those who directly and indirectly
helped me in completing this project.

Name of the student

ASHWINI ANIL MUNJ

CONTENT
PARTICULERS

PAGE NO

1. Acknowledgement . 02
2. Declaration..03
3. Introduction.05
4. Vision And Mission06
5. Objective..07
6. History..09
7. General Profile Of Organization...11
8. Postal Services.12
9. PPF...18
10. SCSS.19
11. RD..20
12. Business Development Activities..21
13. New Products And Services Introduced22
14. Core Banking Solution.25
15. Comparison With Banks..29
16. SWOT Analysis32
17. Suggestions.35
18. Conclusion36
19. Reference And Bibliography..37

Introduction
Indian Postal Service
Department of Posts:

Type

Agency of the Government of India

Founded

1764

Headquarters

New Delhi, India

Key people

Radhika Doraiswamy, Director General

Industry

Postal system

Employees

520,191 (As of 2007)[1]

Website

http://www.indiapost.gov.in/

The Department of Posts (Hindi: ) functioning under the brand name

India Post (Hindi: ) , is a government operated postal system in India; it is
generally referred to within India as "the post office".
The Indian Postal Service, with 155,333 post offices, is the most widely distributed post
office system in the world (China is next, with 57,000 [2]). The large numbers are a result
of a long tradition of many disparate postal systems which were unified in the Indian
Union post-Independence. Owing to this far-flung reach and its presence in remote areas,
the Indian postal service is also involved in other services such as small savings banking
and financial services

VISION STATEMENT OF INDIA POST

India Post will be a socially committed, technology driven, professionally

managed & forward looking Organization
MISSION STATEMENT OF INDIA POST
To provide high quality mail, parcel and related services in India and throughout the
world; to be recognized as an efficient and excellent organization exceeding the
expectations of the customers, employees and the society; to perform the task by:
Total dedication to understanding and fulfilling customer's needs
Total devotion to providing efficient and reliable services, which Customers
consider to be value for money.
Total commitment to providing challenging and rewarding career for every
employee.
Total recognition of the responsibilities as a part of the social, industrial and
commercial life of the country
Total enthusiasm to be forward looking and innovative in all areas.

Objectives
Department of Posts is committed to providing universal access to basic postal services in the
country at affordable prices. Its objectives are to:Ensure availability of basic postal services in all parts of the country, including tribal, hilly
and remote areas.
Provide efficient reliable and economic service.
Provide value added services according to market requirements.
Modernize the services to handle the growing volume of work with efficiency and thereby
enhance customer and employee satisfaction.
Be a forward looking organization, and
Generate more resources and improve financial performance.
As per Government of India (Allocation of Business) Rules, 1961, second Schedule, Rule 3,
Distribution of Subjects among the Departments the Department Of Posts is responsible for
1.Execution of works, including purchase of land debitable to the Capital Budget
pertaining to the Department of Posts.
2.Posts, including Post Office Savings Banks (Administration), Post Office Certificate
(Administration), Post Office Life Insurance Fund (Administration), printing of public
postage stamps/commemorative stamps including postal stationery, premium postal
products and any agency function.
3.International cooperation in matters connected with postal communications, including
matters relating to all international bodies dealing with postal communications such as
Universal Postal Union, Asia Pacific Postal Union (APU), Commonwealth Postal Union.
4.Matters relating to introduction, development and maintenance of all services by the
Post Office including those based on cable, radio and satellite communications channels:
Provided that these matters do not amount to broadcasting, narrow casting, cable
and radio networking services and are also not governed by the Indian Telegraph Act,
1885 and the rules made there under, and not exclusively allotted to any other
Department.
5.Promotion of feasibility survey, research and development in the field of activities
allotted to the Department.

6.Matters relating to administration of the Indian Post Office Act, 1898 and rules made
there under as well as other laws or enactments having a bearing on postal activities, not
specifically allotted to any other Department

10

Old Logo
The British East India Company established post offices in Mumbai, Chennai and
Kolkata from 1764-1766, each serving the Bombay, Madras and Calcutta presidencies.
During Warren Hastings' governorship, postal service was made available to the general
public. A letter would cost 2 annas (one-eighth of a Rupee) for distances up to 100 miles
(160 km). Payments would be done through copper tokens; a letter was hand stamped
"post paid" if paid for, otherwise it was stamped "post unpaid" or "bearing".
In 1839, North West Province Circle was formed and since then, new Postal Circles were
formed as needed. In December 1860 Punjab Circle, in 1861 Burma Circle, in 1866
Central Province Circle and in 1869 Sind Circle was formed. By 1880 circles had been
formed in Oudh (1870), Rajputana (1871), Assam (1873), Bihar (1877), Eastern Bengal
(1878) and Central India (1879).
Afterwards, the creation of new circles was accompanied by the merging of some circles.
By 1914, there were only 7 Postal Circles Bengal & Assam, Bihar & Orissa, Bombay
(including Sind), Burma, Central, Madras, Punjab & NWF and U.P.
The usage of the stamps began on 1 July 1852 in Scinde/Sindh district, with the use of an
embossed pattern on paper or wax. The shape was circular, with "SCINDE DISTRICT
DAWK" around the rim, leading to the common name "Scinde Dawk". 1854 was the year
of the first issue for all of India. The stamps were issued by the British East India
Company, which first printed a 1/2a vermilion in April but never sold it to the public,
then put four values (1/2a, 1a, 2a, 4a) on sale in October. All were designed and printed in
Calcutta, featuring the usual profile of Queen Victoria. A new set of stamps, with the
queen in an oval vignette inside a rectangular frame, and inscribed "EAST INDIA
POSTAGE", was printed by De La Rue in England (who produced all the subsequent
issues of British India) and made available in 1855. These continued in use until after the
British government took over administration of India in 1858, and from 1865 were
printed on paper watermarked with an elephant head

11

Governance and organization

The postal service comes under the Department of Posts which is a part of the Ministry of
Communications and Information Technology under the Government of India. The apex
body of the department is the Postal Service Board. The board consists of a chairman and
three members. The three members hold the portfolios of Operations & Marketing,
Infrastructure & Financial Services, and Personnel. The Joint Secretary and Financial
Advisor to the Board is also a permanent invitee to the Board.
India has been divided into 22 postal circles. Each circle is headed by a Chief Postmaster
General. Each Circle is further divided into Regions comprising field units, called
Divisions, headed by a Postmaster General. Other functional units like Circle Stamp
Depots, Postal Stores Depots and Mail Motor Service may exist in the Circles and
Regions.
Besides the 22 circles, there is a special Circle called the Base Circle to cater to the postal
services of the Armed Forces of India. The Base Circle is headed by an Additional
Director General, Army Postal Service holding the rank of a Major General.

Network
India has the largest Postal network in the world with 1,55,669 Post Offices of which
89% are in rural areas. At the time of independence, there were 23,344 Post Offices,
which were primarily in the urban areas. Thus the network has registered a seven fold
growth over the last five decades, the focus of this expansion being in the rural areas. On
an average, a post office serves an area of 21.09 sq. km. & population of 6,585. Through
these offices it ensures daily delivery of dak at the doorstep of every customer all over the
country, collection of letters through letterboxes, and also sale of stamps and stationery
through village postmen at the doorstep of customers in rural areas. Post Offices in Urban
and Rural areas provide a range of basic postal services to the customers, including
banking and insurance services. Bill collection felicities are being extended through all
post offices in urban areas, and identifying post offices in rural areas. Certain value
added services are being provided in selected offices in urban areas.
Efforts are also being made to identify means of providing postal services through more
cost effective measures. The Licensed Stamp Vendor Scheme, Licensed Postal Agents
Scheme and the Panchayat Sanchar Sewa Yojana(PSSY) were initiatives that were taken
up in this regard. So far 7,697 Panchayat Sanchar Sewa Kendras(PSSKs) have been
opened, including 2,371 PSSKs under the 10 th Plan. Since an assessment of these
schemes indicates the need for restructuring them, no targets were given in 2004-05 for
opening PSSKs.
The following Rules and Manuals are referred in respect of Savings Bank Operations
and services-:
The Government Savings Banks Act, 1873
12

The Government Savings Certificates Act, 1959

The Post Office Savings Bank General Rules, 1981
The Post Office Savings Account Rules, 1981
The Post Office Recurring Deposit Rules, 1981
The Post Office Time Deposit Rules, 1981
National Savings Scheme Rules, 1992
Post Office (Monthly Income Account) Rules, 1987
Indira Vikas Patra Rules, 1987
National Savings Certificates (VIII Issue) Rules, 1989
National Savings Scheme Rules, 1987
The Post Office Savings Certificates Rules, 1960
Senior Citizens Savings Scheme Rules, 2004
Post Office Savings Bank Manual Volume I
Post Office Savings Bank Manual Volume II

13

GENERAL PROFILE OF THE ORGANISATION, FUNCTIONS AND DUTIES

The Department of Posts comes under the Ministry of
Communications
and Information Technology, Government of India, functions under the Minister for
Communications and Information Technology, and has a Minister of State for
Communications to assist the
Minister
of Communications and Information
Technology in the discharge of various functions. The Secretary, Department of
Posts, as the Chief Executive of the Department, is also the Director General, India
Post, and the Chairman of the Postal Services Board.
Shri. Kapil sibal is the Minister of Communications
and
Information
Technology And Dr. Sachin pilot is the Minister of State for Communications and
Information Technology.
Ms. Manjula Prasher is the Secretary (Posts) to Govt. Of India as well as Director
General, Department of Posts and the Chairman of the Postal Services Board.
The Postal Services Board, the apex management body of the Department,
comprises the Chairman and three Members. The Members of the Board hold portfolios
of Operations, Development and Personnel. The Joint Secretary and Financial
Advisor to the Department is a permanent invitee to the Board. The Board is
assisted by a senior staff officer of the Directorate as Secretary to the Board.
Presently, Deputy Director General (FS) is assisting the Board in this capacity. Deputy
Directors General, Directors and Assistant Directors General provide necessary
support for the Board at Headquarters. The Postal Services Directorate is the
Headquarters organization located at Dak Bhawan, New Delhi, to oversee the operations
in the provision of postal services throughout the country.
For providing postal services, the whole country has been divided into 22 Postal
Circles. These Circles manage the day-to-day functioning of the various Head Post
Offices, Sub - Post Offices and Branch Post Offices, through their Regional and
Divisional level arrangements.

14

Postal Services
A small rural post office at Chamundi Hills, near Mysore, Karnataka

Speed PostThe very high speed express service for letters and documents. Speed Post links more
than 1200 towns in India, with 290 Speed Post Centres in the national network and
around 1000 Speed Post Centres in the state network. For regular users, Speed Post
provides delivery anywhere in India under contractual service. Speed Post offers a
money-back guarantee, under which the Speed Post fee will be refunded if the
consignment is not delivered within the published delivery norms.
e-PaymentThe most convenient way to pay your bills under one roof. With its tremendous reach and
expertise India Post specializes in acceptance of payments across the counter and their
consolidation. e-Payment is a Many to One service through which bills (telephone,
electricity, etc.) paid by customers in post offices are electronically consolidated.
Logistics Post-

15

A brand new service from India Post great for sending parcels and large consignments
across the nation and around the world. Logistics Post manages the entire distribution
side of the logistics infrastructure from collection to distribution, from storage to carriage,
from order preparation to order fulfilment. Logistics Post is an ideal service for sending
large consignments including multi-parcels, just-in-time parcels, bulk-break
consignments and goods of any weight. While Parcel Post offers weight up to 35 kg,
Logistics Post has no weight limit. Logistics Post offers not only physical logistics
services but also provides comprehensive supply chain management services, leading to
improvement in the service level efficiency
e-PostDocuments and greetings sent online but delivered by mail
Business PostTotal pre-mailing solutions including collection/printing, inserting, and addressing.
Media PostReach millions through advertisements on Post cards, Letters walls of post office, letter
boxes, post cards and stationary
.
Direct PostDistributing advertising materials directly to prospective customers.
Postal Life InsurancePostal Life Insurance was started in 1884 as a welfare measure for the employees of Posts
& Telegraphs Department under Government of India dispatch No. 299 dated 18-10-1882
to the Secretary of State. Due to popularity of its schemes, various departments of Central
and State Governments were extended its benefits. Now Postal Life Insurance is open for
employees of all central and state government departments, nationalized banks, public
sector undertakings, financial institutions, local municipalities and Zila Parishads an
Educational Institution aided by the Government.
Instant Money Order Service (iMO)The instant domestic money is available in 717 post offices. However no International
Money Order facility is available
International Money Transfer16

As a result of the collaboration of the Department of Posts with the Western Union
Financial Services, state of the art international money transfer service is now available
through post offices in India. This enables instantaneous remittance of money from 185
countries to India. The recipients can in fact collect the money in minutes after the sender
has made the remittance. The service is targeted to particularly fulfil the needs of NRI
dependent families in India, visiting International tourists and foreign students studying
in India.
Non-postal servicesThe post office has also traditionally served as a financial institution for millions of
people in rural India. Currently these are some of the activities being supported:
Public Provident Fund
National Savings Certificate
Savings Bank Account
Monthly Income Scheme
Recurring Deposit Account
National Savings Scheme 1992 - discontinued from 01.11.2002
Post Office Time Deposit
Post boxes for mail receipt

Post Office Savings Account

Rate of interest 4.0% per annum

Minimum amount Rs 50/- in case of non-cheque account, Rs.500/- in case of

cheque account.

Maximum balance permissible is Rs 1,00,000/- in a single account and Rs

2,00,000/- in a joint account.

Interest Tax Free.

17

 Any individual can open an account

Cheque facility available.

Group Account, Institutional Account, other Accounts like Security Deposit

account & Official Capacity account are not permissible.

Post Office Monthly Income Scheme (MIS)

Interest rate of 8.5% per annum payable monthly w.e.f. 01.04.2012

Maturity period is 5 years.

No Bonus on Maturity w.e.f. 01.12.2011.

No tax deduction at source (TDS).

No tax rebate is applicable.

Minimum investment amount is Rs.1500/- or in multiple thereafter.

Maximum amount is Rs. 4.50 lakhs in a single account and Rs.9 lakhs in a joint
account.

18

 Auto credit facility of monthly interest to saving account if accounts are at the
same post office.
Account can be opened by an individual, two/three adults jointly, and a minor
through a guardian.

Non-Resident Indian / HUF cannot open an Account.

Minors have a separate limit of investment of Rs. 3 lakhs and the same is not
clubbed with the limit of guardian.
Facility of premature closure of account after 1 year but on or before 3 years @
2.00% discount.
Deduction of 1% if account is closed prematurely at any time after three years.

Suitable scheme for retired employees/ senior citizens and for those who need
regular monthly income.

Post Office Time Deposit Scheme

1 year, 2 year, 3 year and 5 year time deposits can be opened.

19

 Interest payable annually but compounded quarterly:

PERIOD

RATE
OF
INTEREST

One Year

8.2%

Two Years

8.3%

Three Years

8.4%

Five Years

8.5%

Minimum amount of deposit is Rs 200/- and in multiples of Rs 200/- thereafter.

No maximum limit.

Investment up to Rs 1,00,000/- per annum qualifies for Income Tax Rebate under
section 80C of IT Act.

Interest income is taxable.

Facility of redeposit on maturity of an account.

In case of premature closure of 1 year, 2 Year, 3 Year or 5 Year account on or after

01.12.2011 between 6 months to one year from the date of deposit, simple interest
at the rate applicable to from time to time to post office savings account shall be
payable.

20

 2 year, 3 year or 5 year accounts on or after 01.12.2011 if closed after one year,
interest on such deposits shall be calculated at a discount of 1% on the rate
specified for respective period as mentioned in the concerned table given under
Rule 7 of Post office Time Deposit Rules.

Account can be pledged as security against a loan to banks/ Government

institutions.

Any individual (a single adult or two adults jointly) can open an account.

Group Accounts, Institutional Accounts and Misc. account not permissible.

Trust, Regimental Fund or Welfare Fund not permissible to invest.

National Savings Certificate (NSC)

NSC VIII Issue (5 years) Interest rate of 8.6% per annum w.e.f. 01.04.2012

NSC IX Issue (10 years) - Interest rate of 8.9% per annum w.e.f. 01.04.2012

Minimum investment Rs. 100/-. No maximum limit for investment.

No tax deduction at source.

21

 Investment up to Rs 1,00,000/- per annum qualifies for Income Tax Rebate under
NSC - section 80C of IT Act.

Certificates can be kept as collateral security to get loan from banks.

Trust and HUF cannot invest.

A single holder type certificate can be purchased by an adult for himself or on

behalf of a minor or to a minor.

The interest accruing annually but deemed to be reinvested will also qualify for
deduction under NSC - section 80C of IT Act.

Public Provident Fund (PPF)

Interest rate of 8.8% per annum w.e.f. 01.04.2012.

Minimum deposit is 500/- per annum. Maximum deposit is Rs. 1,00,000/- per
annum

The scheme is for 15 years.

Investment up to Rs 1,00,000/- per annum qualifies for Income Tax Rebate under
section 80C of IT Act.

Interest is completely tax-free.

22

 Deposits can be made in lumpsum or in 12 installments.

One deposit with a minimum amount of Rs 500/- is mandatory in each financial

year.

Withdrawal is permissible from 6th financial year.

Loan facility available from 3rd financial year upto 5th financial year. The rate of
interest charged on loan taken by the subscriber of a PPF account on or after
01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue
to be charged on the loans already taken or taken up to 30.11.2011.

Free from court attachment.

Non-Resident Indians (NRIs) not eligible.

An individual cannot invest on behalf of HUF (Hindu Undivided Family) or

Association of persons.

Ideal investment option for both salaried as well as self employed classes.

Senior Citizen's Savings Scheme

Interest @ 9.3% per annum from the date of deposit on quarterly basis w.e.f.
01.04.2012

23

 Minimum deposit is Rs 1000 and multiples thereof. Maximum limit of 15 lakhs.

Maturity period is 5 years and can be extended for a further period of 3 years.

Age should be 60 years or more, and 55 years or more but less than 60 years who
has retired under a Voluntary Retirement Scheme or a Special Voluntary
Retirement Scheme on the date of opening of the account within three months
from the date of retirement.

No age limit for the retired personnel of Defence services provided they fulfill
other specified conditions.

The account may be opened in individual capacity or jointly with spouse.

TDS is deducted at source on interest if the interest amount is more than Rs

10,000/- per annum.

Investment up to Rs 1,00,000/- per annum qualifies for Income Tax Rebate under
section 80C of IT Act.

Interest can be automatically credited to savings account provided both the

accounts stand in the same post office.

Premature closure is allowed after one year on deduction of 1.5% of the deposit
and after 2 years on deduction of 1%.

No withdrawal permitted before the expiry of a period of 5 years from the date of
opening of the account.

24

 Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible
to open an account.

Recurring Deposit Account

Post office recurring deposit is small savings scheme promoted by Govt of India which
can be opened in any of the post office. One can deposit as small as Rs 10 every month.
On maturity after 5 years, INR 10/- account fetches INR 728.90/-. Can be continued for
another 5 years on year to year basis.Any individual (a single adult or two adults jointly)
can open an account.
Features of post office recurring deposit

Minimum INR 10/- per month or any amount in multiples of INR 5/-. No
maximum limit.

6 & 12 months advance deposits earn rebate.

Four defaults are allowed.

Defaults can be paid within two months.

One withdrawal upto 50% of the balance allowed after one year.

Premature closure allowed after three years.

Rate of interest 8.4%.

Full maturity value allowed on R.D. Accounts restricted to that of INR. 50/denomination in case of death of depositor subject to fulfillment of certain conditions.

25

Business Development Activities-

The Business Development Directorate was set up in 1996 to design, monitor, develop and
market value added premium products of the Department. The Business Development
Directorate is responsible for the operations and marketing of speed post, speed post
passport service, business post, greeting post, express parcel post, media post, megdoot
post card, data post, e-bill post, e-post, bill mail service and logistic post.

Financial servicesThe Post Office Savings Bank is the oldest and largest banking institution in the country. It
operates about 140 Million Savings Accounts. The Post Office Savings Bank Scheme is an
agency function performed by the Department of Posts on behalf of the Ministry of
Finance, Government of India. The Ministry of Finance remunerates Department of Posts
for this agency work at a rate fixed from time-to-time. During the last financial year 200304, the Department earned approximately Rs. 17,000 Millions as remuneration for
discharging various responsibilities relating to the Savings Bank.
Post Office Savings Bank has a customer base of 140 Million account holders with annual
deposits exceeding Rs. 9,70,000 Million. Savings Bank facilities are provided through a
network of 1,54,000 Post Offices, which is double the size of all banks outlets in the
country, put together. Eight products are retailed from the Post Offices across the country.
There are also a number of Schemes covered under the Post Office Savings Bank and these
include Savings Account Schemes, Recurring Deposit Schemes, Time Deposit Schemes,
Monthly Income Schemes, Public Provident Fund Schemes, Kisan Vikas Patras, National
Savings Certificates and the Senior Citizen Scheme 2004. The outstanding balance under
all national savings schemes in Post Offices is over Rs. 3,750,000 Million.

26

Financial Services Provide As we have an extensive network, post offices serve the nation by providing various
agency services like banking services. The banking services offered at post office counter
are:
Savings Bank Account
Recurring Deposit Account
Time Deposit
Public Provident Fund Account
Monthly Income Scheme
National Savings Scheme Account,1992
National Savings Certificates VIII th issue
Kisan Vikas Patras
Senior Citizens Savings Scheme
New Products and Services introduced by Department of Posts
In recent years, the Department of Posts has tried to leverage its reach and
remittance facility as well as the credibility it enjoys to diversify the range of financial
products and services that the Department of Posts can offer to its customers. With the
induction of technology and progressive computerization of the network, the
Departments capability to provide more value added services has increased. Details of
some of the services being presently offered by the Department are given below:Mutual Funds & BondsThe Mutual Funds industry has made rapid strides in the country, with assets
worth nearly Rs. 1,550,000 Million this industry is under the management of various
Assets Management Companies. India Post has entered into the business of retailing
mutual funds through select offices. Since February, 2001, a growing network of over
250 Post Offices are distributing select Mutual Funds and Bonds (Principal/PrudentialICICI/SBI/ICICI Capital/IDBI/RBI Bonds). Mutual Fund industry is a new growth area
in financial services. Therefore, as a retailer, India Post is expected to gain a higher
revenue share through commissions and trail commissions. Today the financial services
portfolio of India Post has a large number of other relevant financial products like RBI
India Relief Bonds, IDBI Flexi Bonds and ICICI Pension Fund, etc. The Department has
also recently entered into a tie up with the UTI Asset Management Company Limited,
which is the largest player in the Mutual Fund market in the country, to retail its five
mutual fund schemes, on a pilot basis, from select Post Offices. Till date business worth
over Rs. 50 Million has been retailed by the post office network. This service has helped

27

to extend the reach of the capital market of the country and provides the common man
easy access to market based investment options.
Electronic Fund TransferA facility for Electronic Fund Transfer was launched in October, 2001, leveraging the
VSAT network of the Department to facilitate end-to-end fund transfers by Banks
(UTI/IDBI/HDFC) on behalf of the corporate sector as well as the Capital Market. Banks
use this facility to transfer funds to locations where they do not have a presence.
Warrant PaymentThe Warrant Payment Scheme was launched in January, 2002. It has facilitated
redemption of over 73,000 dividend warrants of UTI and Citibank worth more than Rs.
1,000 Million through the postal network, establishing the ability of the Department to
undertake this critical service, for the countrys Capital Market.
Electronic Clearance Service (ECS)The Department of Posts has introduced Electronic Clearance Service (ECS), on a
pilot basis, in Mumbai City from 9th August 2003 through 70 Post Offices. The
Electronic Clearance Service is being offered in connection with payment of interest
under the Monthly Income Scheme(MIS). The depositor can have the facility of
automatically transferring interest from the MIS account and crediting it into the SB
account at any designated bank electronically, by due date, through the RBI Clearing
House. A nominal charge of Rs. 20/- per transaction is levied on the customers opting for
this facility. As there is a growing demand from customers in different parts of the
country, the Department proposes to extend the ECS scheme beyond Mumbai to 46 more
cities where the RBI-EFT (Electronic Fund Transfer) facility is currently available.
International Money Transfer ServiceThis service provides customers the facility of receiving remittances from more
than 196 countries on a real time basis. The service is currently available from more than
4500 post offices. Remittances in excess of US Dollars 125 Million have been delivered
through this service since April 2001. It has brought in remittance worth 72 Million US
Dollars from April 2003 to March 2004 and has generated a revenue of Rs.58.9 Million.
The focus of the Departments initiatives in the area of financial services is to provide a
bouquet of services that will cater to the needs of the customer, leveraging the retailing
outreach of the network, so that the Post Office gradually becomes a one-stop shop for a
range of such services.

28

Postal Life InsurancePostal Life Insurance (PLI), introduced in 1884, is the oldest life insurance scheme for
the benefit of Government employees. Initially meant only for the Postal employees,
today it caters to employees of the civil and military personnel of the central and state
governments, local bodies, government aided educational institutions, universities,
nationalized banks, many autonomous and financial institutions, and public sector
undertakings of the central and state governments. In a major innovation, Rural Postal
Life Insurance (RPLI) scheme was also introduced in 1995 for the benefit of the entire
rural populace.
PLI offers the following types of policies: i

Whole Life Assurance (Suraksha)

ii

Convertible Whole Life Assurance (Suvidha)

iii

Endowment Assurance(Santosh)

iv

Anticipated Endowment Assurance for 15 & 20 years (Sumangal)

Joint Life Endowment Assurance (Yugal Suraksha)

Under RPLI, there are first four common plans and one additional plan 10 year
RPLI. Their trade names are as indicated below: i

Whole Life Assurance (Gram Suraksha)

ii

Convertible Whole Life Assurance (Gram Suvidha)

iii

Endowment Assurance (Gram Santosh)

iv

Anticipated Endowment Assurance for 15 & 20 years (Gram

Sumangal)

10 year RPLI (Gram Priya)

An Extra Departmental Agents Group Insurance Scheme was introduced with

effect from 01.04.1992 and a monthly subscription of Rupees 10/- is deducted from the
salary of its beneficiaries. As on 31.03.2004 there were 2,57,695 members under this
scheme. In the event of death of its beneficiary, an amount of Rupees 10,000/- is paid out
of the insurance fund, in addition to accretion in the savings and the interest on it. On
31.03.04 the balance in this scheme was Rs. 530.1 Million.

29

Customer CareIndia Post lays maximum stress on customer care in rendering its services and also to sort
out the grievances that arise in the course of providing these services. Customers can
lodge their complaints about our services at their nearby post office which are authorized
to collect them. The complaints are consolidated at a customer care centre which registers
these cases on the website to obtain a reply online for a final reply at the earliest. There
are 1116 computerized customer care centers to handle public grievances online. The
Department also provides the facility of online registration and response to complaints at
its website.
NORMS FOR VARIOUS POSTAL SERVICESDepartment of Posts is proud to have the largest postal network in the world-.
Our service area continues to expand to reach people even in hilly, difficult and
inaccessible terrains. At the same time there is a continuous endeavor to improve our
services/operations with innovative ideas and induction of technology. Our commitment
towards rendering better service emanates from our Mission. Our Mission guidelines are:
Total dedication to understanding and fulfilling customer needs;
Total devotion to providing efficient and reliable service which the customers
consider to be value for money;
Total commitment to providing challenging and rewarding career for every employee;
Total recognition of the responsibilities as a part of the social, industrial and
commercial life of the country
Total enthusiasm to be forward looking and innovative in all areas.
The Department has formulated and implemented in all major offices its citizen's charter,
which is an expression of our commitment towards improving our services offered to
make them more efficient and responsive and at the same time making our working more
transparent to our valued customers.
The citizen's charter is an attempt to bring the Department closer to its customers.

Our Citizen's Charter Commitments We will treat you with courtesy and consideration.
Our staff will be helpful.
We will attend promptly to your enquiries and complaints.
30

 We will provide all the necessary information at customer care centers.

We will speedily redress customer grievances.
We will make posting facilities easily accessible as far as possible.

Introduction to Core Banking Solution

India posts maintains:
Over 24 Crore accounts
with a deposit of rupees 5.5 Lakh crore rupees
in 1.5 lakh post offices.
India post is losing its customers due to lack of modernization in its
customer experience and operations.
At present, India post does not have the services of ATMs, Mobile banking
and demat certificates facility.

Need for Core Banking Solution in Post Office

Majority of work in manual form.
Data is re-entered at many levels thereby chances of mistakes are
higher.
Many deficiencies in Sanchay Post.
No authentication of data as posting and agreement in huge arrear.
Lack of security features in the existing software.
Data is frequently changed at many levels.
Password is often shared with others.
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 No MIS facilities
Poor record maintenance
Inadequate audit functions
Non agreement of balances
No ATM or Internet Banking facilities available to match competitors.
No Real Time Processing
No Debit Card facility.
No networking.

Benefits of Core Banking Solution

Reduction in transaction time
Elimination of duplication.
Minimum chance of mistake.
Generation of different types of management Information.
Uniform changes in all systems.
Interest calculation can be done uniformly in quick time.
Introduction of any new scheme at short notice.
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 Anywhere-Anytime-Anybranch banking.
Issue of debit cards thereby reducing lines in post offices.
Internet banking.
ATM facilities.
Account to Account transfer of funds in real time.
Compatible for ECS and RTGS.
In built features of balancing.
More security features for data-base.

Pre requirements to introduce Core Banking Solution in Department of Post:

Updation of transaction feeding in all categories
Settlement of un posted items, will follow items and all objections
including minus balance.
Agreement of office wise balances to ensure the authentication of data
Preparation of daily consolidation in Sanchay Post to ensure 100%
transaction feeding.

33

Comparison
Post office

Stat Bank

Punjab Bank

Departme
nt

Type
Founded

Agency of the Government Public (BSE, NSE:SB Public (BSE, NSE:PN

of India
I) & (LSE:SBID)
B)
1764

Kolkata, 1806 (as Lahore, 1895

Bank of Calcutta)

Head
Quarters

New Delhi, India

Mumbai 400
India

021 New Delhi, India

Key
people

Radhika
Doraiswamy, Om
Prakash
Director General
Bhatt,Chairman

Industry

Postal system

Product

Post card, postal stamp, Loan,

Credit Loan,
Credit
Speed
post,e- card,Savings,Investm card,Savings,Investm
payment.logistic payment; ent SBI LIC
ent PNB LIC
Business
post
,Direct
post,PLI,Money
order,PPF,NSC,KVP,SBA,
MIS,etc

Employee
s

520,191

205,896

Branch

155,333

16000

4,904

Website

http://www.indiapost.gov.
in/

StateBankofIndia.co
m

www.pnbindia.com

---

Banking. Insurance. Banking. Insurance.

Capital Markets and Capital Markets and
allied industries
allied industries

34

---

Bank deposits v/s post office savings:

Everyone says interest rates are rising. This is true even for deposit rates. So does that
mean bank deposits could now be a better option to post office savings? Here is a birds
eye view of recurring and fixed deposits offered by banks and post-office.

Post office Recurring Deposits VS Bank Recurring Deposits

A post office recurring deposit account (RDA) is similar to a recurring deposit in a bank,
where you can invest a fixed amount on a monthly basis. The postal RDA has a fixed
tenure of five years.

These deposits accumulate money at an annual fixed rate of interest of 8 per cent. The
interest is compounded on a quarterly basis. The minimum investment in a post office
RDA is Rs 10 and there is no prescribed upper limit. For example, if you invest Rs 100
every month in 60 installments, you will earn a sum of Rs 7,289 after 5 years.

Banks, however, offer a flexible time period on their recurring deposits. You can open an
RDA for a minimum period of 6 months, and thereafter in multiples of 3 months up to a
maximum period of 10 years.

In banks, you can start a recurring deposit with State Bank of India (SBI) for a monthly
installment of Rs 100 whereas ICICI Bank has kept its minimum deposit limit at Rs 500.

35

An individual can open an RDA account with a post office individually or one in a joint
form with another investor, or a guardian on behalf of the minor who has attained the age
of 10 years can open an RDA account in his/her own name.

The advantage with post-office deposits is that it offers a fixed rate of return for the
duration of the deposit, while banks constantly review their recurring deposit rates.

However, the disadvantage with post office savings is that that in the age of convenience
banking, you will have to visit the post office every month. In case of banks, the amount
is automatically debited from your account. Premature withdrawal, however, cannot earn
you desired returns.

In post office RDA, you can withdraw up to half the balance. On premature closure of the
account (after one year), interest is payable as per the rate for the Post Office Savings
Bank Account, which is 3.5 per cent.

In the case of banks, premature closure of an RDA will attract a penal interest. This
means the depositor will get interest around 1 per cent less than the prevailing rate. It will
certainly be higher than the 3.5 per cent paid by post office.

Post office Time deposits vs Banks Fixed Deposits

Just like banks fixed deposits (FDs), post office time deposits are meant for those

36

investors who want to deposit a lump sum for a fixed period.

Time Deposits are of 1 year, 2 year, 3 year and 5 year tenures. The minimum investment
should be Rs 200 and its multiples. The tenure of bank fixed deposits are flexible, with
periods ranging from 15 days to 10 years but the minimum amount is as high as Rs
10,000.

In case of postal time deposits, the account can be closed after 6 months but before one
year of opening the account. On such closure, the amount invested is returned without
interest. If a time deposit of two or three years is withdrawn prematurely, post office will
pay interest only for the completed year or years.

For example, a fixed deposit for two years is withdrawn after 20 months, interest will be
paid only for the one full year completed. The depositor will lose interest for the
remaining 8 months.

If a bank FD is closed before completing the original term of the deposit, banks have the
discretion to charge penal interest. If a bank decides to charge penal interest, the
depositor will be paid interest at a lower rate than that was contracted.

SWOT ANALYSIS
A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to
evaluate the strengths, weaknesses, opportunities and threats involved in a project or
in a business venture. A SWOT analysis can be carried out for a product, place, industry
or person. It involves specifying the objective of the business venture or project and
37

identifying the internal and external factors that are favorable and unfavorable to achieve
that objective. Some authors credit SWOT to Albert Humphrey, who led a convention at
the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data
from Fortune 500companies.[1][2] However, Humphrey himself does not claim the creation
of SWOT, and the origins remain obscure. The degree to which the internal environment
of the firm matches with the external environment is expressed by the concept of strategic
fit.

Strengths: characteristics of the business or project that give it an advantage

over others.

Weaknesses: characteristics that place the business or project at a

disadvantage relative to others.

Opportunities: elements that the project could exploit to its advantage.

Threats: elements in the environment that could cause trouble for the business
or project.

Identification of SWOTs is important because they can inform later steps in planning
to achieve the objective.
First, the decision makers should consider whether the objective is attainable, given
the SWOTs. If the objective is not attainable a different objective must be selected
and the process repeated.
Users of SWOT analysis need to ask and answer questions that generate meaningful
information for each category (strengths, weaknesses, opportunities, and threats) to
make the analysis useful and find their competitive advantage.

SWOT ANALYSIS
1. STRENGTH

More products in comparison to SBI and PNB

38

More branches, more facilities

More employees

More services

Good facilities to customers

Strong Network

Cost Effective

Security /Safety with respect to deposits

Efficient Manpower

2. Weakness

No advertisements

Not provide loan to consumer

Unchanged working culture

Job stress among employees

Lower rate of interest on deposits as competors

3. Opportunity

In rural and urban areas

In vendoring field

In developing Indian economy

In developing communication to other countries

In developing good rapport with people

Increasing number of customer

Inflationary market

Technological advancement

4. Threat

Courier services

A lot of courier companies

Insurance companies
39

Banking sector

Customer dissatisfaction

Increasing market share of competitors

Competitors' Strategy To Increase The Market

The competitors of Indian Postal Services are attracting the customers by a number of
ways. The following are the remarkable signs that leave their print in the heart of
customers while visiting the private sector banks / insurance companies, courier
companies:
1.- At the entrance of the office, one security person wishes warmly and pulls the
door for you. (First impression is the last impression).
2.- Gesture and posture of the employees and their appearance makes the
environment pleasant.
3.- Time effectiveness.
4.- Effective working culture that helps employees to be more productive.
5.- Interconnection among small companies (for example a courier company with
limited network, makes a tie-up with another company and drops the mails to the
desired destination.).
6.- Provides higher rate of interest on deposits.
If we compare the SWOT Analysis of Indian Postal Services with its Competitors'
Strategy to increase their market share, we would come to know that the ' strength' of
Indian Postal Service is very strong and if it makes certain changes in its policies it can
remove its 'weakness' and can easily overcome from the 'threat' situation.
If there is a 'problem' in the relationship among the family members, it can be removed
only by painting the heart of the family members rather than painting the walls of the
house. In a company, family means the relationship between:
i.- Top Level Management,
ii.- Middle Level Management,
iii.- Lower Level Management, and
iv.- The Customer
The customers are also a part of our professional family and to strengthen the relationship
with the customers, efforts should be done from entire family members whether it is a top
level management or a lower lavel management

40

Suggestion
There are a few suggestions which may help to Indian Postal Service Department in its
further growth:
i.- To increase the productivity of the employees, Job Rotation Policy should be
adopted because a similar nature of work makes an employee irritate and lessproductive.
ii.- Soft Skill Training is provided to the employees but the implementation
should be done from the Top Level Management because they are the leaders. If a
leader will come late in the office, the follower will also come late.
iii.- Employees are the internal customers of a company. Their satisfaction carries
a greater value. A true & fair feedback system should be their where each
employee can put their words without any fear.
iv.- Employees should be motivated for providing suggestions and if any
suggestion is really valuable, proper attention is required . There should not be
any adverse action against employees at the time of providing suggestion.
v.- A dress code should be there to form uniformity among employees and the
colour of the uniform should be in a light shade because it makes the working
environment cool. (All the colours have their psychological effect.)
vi.- No employee should be allowed to work overtime. Even he should not work
after the duty-hour. Because, the efficiency & effectiveness in the work means
completion of a work within the time limit.
vii.- An attractive infrastructure attracts the customers. Therefore, attention
should be given towards this side.
viii.- Time is precious for every one. With this motto, the customer service
department should work so that there shall not be a long queue in any counter.
ix.- Customer-friendly environment should be there in every counter.
x.- In today's inflationary market, banking sector is providing higher rate of
interest on deposits. The postal service department should also adopt this kind of
strategy to retain their customers.
xi.- The postal service department should adopt an adequate promotional policy.
For example, advertisement in local newspaper for financial services provided by
the Indian Postal Department.

41

Conclusion

It can be concluded, that Indian Postal Service needs technological, social, cultural &
economic change. With a little bit of change, it can create a monopoly in the market.
But Indian postal services is only one central government services for Indian peoples as
well as post card , postal stamp KVP , NSC ,MIS and other some product which is best
campier to other private company like Postal life insurance.
Lastly conclusion is a - - - - - - - -

India is a beautiful so our Post Office

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References / Bibliography

www.indiapost.gov.in

Wikipedia

www.business-standard.com

www.indiapost.gov.in/POSBActs/SMALLSAVINGSSCHEMES.pdf

www.moneycontrol.com

articles.economictimes.indiatimes.com

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