This report analyzes possibilities forincreasing revenues for India Post through expandingchanneling of financial services. The Indian postal networkis among the largest networks in the world in terms of areacovered and population served, and constitutes an importantmechanism of achieving transportation and communication.Within India Post, the Post Office Savings Bank (POSB) isone of the oldest and largest financial institutions (withlargest deposit base) in the country. The key objective ofPOSB is to provide people living in rural, semi-urban,remote and inaccessible areas of the country with an easyand reliable means of making investments, making remittancesand operating savings accounts. It is of strategicimportance for POSB to increase market-based revenues so asto gain better control of its market orientation and revenuestructure. In addition, though POSB still retainscompetitive advantages over commercial banks, it will not belong before the competition replicates these advantages.Hence, in order to better leverage the vast network of thepost offices and huge customer base, India Post requiresevaluating the introduction of a wide range of products andservices in the financial services area. This will also leadto improvement of the earnings from savings related productsvis-a-vis the total earnings. Banks (e.g. foreign, privatebanks) lack the network infrastructure to reach underservedsegments in semi-urban and rural areas. There is a demandfor expansion of financial service offerings by the postoffice. Some products and services which will help IndiaPost increase its revenues have been identified. Some ofthese products and services have been introduced aslocalized initiatives by individual circles. However theexperience of these local initiatives needs to be sharedand, based on India Post's experience, rolled out toother locations.
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