Monday, October 26, 2015

Government plans to focus on financial literacy; postmen to tutor rural India on banking system

NEW DELHI: The government is looking to utilise the services of postmen to teach people in rural areas how to use banking services and access various state-sponsored financial inclusion schemes. The finance ministry is working on developing a structured NEW DELHI: The government is looking to utilise the services of postmen to teach people in rural areas how to use banking services and access various state-sponsored financial inclusion schemes. The finance ministry is working on developing a structured programme as part of a new strategy for financial inclusion under which banks will pay a fee to use the services of the postal department.

"The idea is to turn a post office into a financial literacy hub. We will organise weekly literacy camps and selected post office employees will undergo a structured training programme developed by banks on financial literacy," said MS Ramanujan, member (banking and HRD), Department of Posts.

India Post is among the 11 successful entities that recently got in-principle approval for a payments bank licence from the Reserve Bank of India. Tentatively named as 'India Post Payments Bank,' the entity will have an initial capital of Rs 300 crore.'

"We are looking to leverage our entire postal network," said Ramanujan. He said banks will pay a small fee to use the services of the
postal department depending on the location, details of which are being worked out.

A senior finance ministry official said the government is looking to focus on financial literacy as part of its financial inclusion programme. "Now that the accounts have been opened, we want to ensure that people take advantage of all other schemes, including soft loans under the MUDRA Yojana," said the official, who did not wish to be named.


So far, about 18.86 crore accounts have been opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), with deposits of nearly Rs 25,700 crore.

"Around 40% of these accounts have zero balance. We want them to develop a habit of banking, so that they can have a credit history and use other services," the official said.

The Centre had last year launched three social security programmes - the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Pradhan Mantri Jeevan Jyoti Bima Yojana 
(PMJJBY) and the Atal Pension Yojana (APY) - to bring the excluded under the fold of formal financial services. The drive is billed as 'Jandhan to Jansuraksha' or people's money to public security.

The government has set a target of Rs 1.22 lakh crore for loans to be given by staterun banks to promote new entrepreneurs under the Pradhan Mantri Mudra Yojana, which will seek to "fund the unfunded".

ET View

The Postman Rings a Second Time

As services and requirements change, so will jobs. A robust system should be able to leverage the existing infrastructure, including human resources, to perform new functions. The decision to leverage the familiarity and trust associated with the postman to improve financial inclusion is a smart move.

The government could also consider redefining the role of other government functionaries to improve the manner in which different programmes and schemes are accessed by the rural population.

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