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ATM at post offices in the offing

Nithya Subramanian

G. Rambabu

NEW DELHI, July 16

WHOEVER thought that the dingy-old post office would become the most-sought-after premises, especially by the new age banks. Biggies such as ICICI and UTI are in talks with the Department of Posts (DoP) to permit them to set up ATM counters within its pr emises.

Speaking to Business Line, Mr B.M. Som, Secretary, Department of Posts (DoP), said: ``We will be signing an agreement with these banks very shortly and will permit them to set up ATM counters''. The post office is usually located at a convenient spot and banks would like to leverage this advantage.

This could just be the starting point for the DoP which has grand plans for the financial sector. ``We already have a universal obligation and now we want to be a supermarket for all financial products,'' said Mr Som.

And part of the next phase could be distribution of insurance products. ``We are ready to talk to insurance companies and help them distribute products,'' he said.

Also, the Insurance Regulatory and Development Authority (IRDA) is in talks with the department to make the post office a part of the payment system once pension is opened up to the private sector. ``We have told IRDA that we are ready,'' said Mr Som.

The post office is already distributing mutual fund products of IDBI-Principal and SBI Mutual Fund. The department is also planning to tie up with ICICI to distribute bonds. An announcement on this is expected shortly.

``These companies are targeting small investors and the post office provides that accessibility,'' Mr Som said.

But it is not the finance companies which are riding piggyback on the post office. The stock exchanges are also looking at quick money transfer through post office. The National Stock Exchange (NSE) has initiated talks in this regard so that money from r emote corners can be transferred in a day's time.

Also, on the anvil are smart cards and debit cards by the postal department. An alliance with MasterCard International will be struck shortly. ``The aim is to give everything everywhere,'' Mr Som said.

But the post office continues to attract the highest deposits with over 11 million account-holders. According to data available for the year 1999-2000, total cumulative deposits in post office savings bank has been Rs 1,82,204.79 crore. Of this certifica tes accounted for Rs 1,22,222,24 crore.

Post-liberlisation, despite other investment options, the deposits in the post office have grown almost three-fold. The small investor still has more confidence on the good old post office rather than the risky stock market.