‘It’s The Guarantee That Matters’

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‘It’s The Guarantee That Matters’
‘It’s The Guarantee That Matters’
Jyotika Sood - 31 March 2021

While every asset management company and banks claim that investors’ money is safe with them, one of the safest options for parking your wealth remains somewhat subdued. That’s the good-old Post Office Savings Scheme (POSS). In a candid interaction with Jyotika Sood, Pradipta Kumar Bisoi, Secretary to the Department of Posts, shares the insight into the success of POSS through generations. Excerpts from the interview:

What keeps people interested in POSS even today?

National Savings schemes that are offered through post offices are formulated by the Ministry of Finance. Therefore, they come with a sovereign guarantee as the money is with the Indian government when you invest it through these schemes. The other advantage of our schemes is that the rate of interest offered is generally higher than what banks offer because the rates are decided by the government and it tries to give some additional advantage to the public. Another major benefit of having a savings bank account in the post office is that there is no insurance limit of `5 lakh like public and private banks as there is sovereign guarantee on deposits made under these schemes. Therefore, your money is safe.

What about your insurance scheme?

The Postal Life Insurance scheme started in 1884. In fact, that is an exclusive postal department product. It was started for the benefit of postal employees and extended over the years to central and state government employees, professionals like CAs, lawyers, doctors, MBAs, engineers, journalists and employees of PSUs, banks, educational institutions, and those working in companies listed on the NSE and BSE. We pay the highest bonus against minimum premium even when compared to life insurance giants. While insurance companies calculate bonuses based on different factors, ours is similar across the time period. We also have Rural Postal Life Insurance schemes. We are managing assets of around `1 lakh crore in the Post Office Life Insurance Fund.

What kind of people invest in post office schemes?

I would say people from all economic classes. Frankly speaking, most people are not aware of the large number of options we offer. Over 95 per cent of our branches are computerised and it is not necessary for you to go to the home branch for any transaction. You can get it done either through POSB Internet Banking and the mobile banking app or can walk to the nearest post office. We have also launched core banking operations. During Covid, we did more than 50 crore transactions worth Rs 10 lakh crore. It gives an idea about our user base. Besides, we have 1,000 ATMs, which are interoperable. Last year we got the NEFT, RTGS, UPI, AePS and debit card licence from the RBI and by December 2021, these services will be available in post office savings accounts. The Department of Posts serves more than 50 crore customers through more than 1.5 lakh post offices and has an outstanding balance of `10,78,535 crore under the Post Office Savings Bank Schemes.

In this age of online transactions, how are you managing operations?

We started internet banking and mobile banking for POSB customers in 2018 and 2019. These facilities are available within the post office network. Once NEFT and RTGS are implemented, these will be on a par with similar facilities from different banks. We also have a Post Info app where the public can see what investment will yield them what returns. It gives all details about postal saving schemes and their rates of interest. During the Covid days, we also introduced the mobile app service requests where you can request a specific postal saving scheme service at your doorstep.


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