India Post turns to small ventures to stay in business

India Post turns to small ventures to stay in business

CHENNAI: Vetrivelan S, a 45-year-old businessman from Kancheepuram, has memories of hanging on the gate of his house during the afternoons, waiting for the postman to arrive. "It was my job to pick up letters for my grandmother," he said. "She would eagerly wait for letters from her four sisters who were settled in other parts of the state. The postman would arrive, enquire about her sisters from my grandmother and then leave. He knew everybody in that area." 

Today, Vetrivel cannot remember the last time he saw a postman or stepped into the post office, except two months ago, when the local post offices in Kancheepuram district began selling solar lamps. "With six-hour-long power cuts, it was difficult for my daughter to study for her school exams in March," he said. "I heard the post office was selling solar lamps and I bought two of them." 

The image of India Post is slowly undergoing a change as the department is now expanding its business to tie-up with small ventures and provide an outlet for sale of their products. With emails and electronic banking becoming all too common, the age of the postman is dying out. With their primary source of revenue drying up, the postal department is now looking at other avenues to fill their coffers. 

"So far we have been relying on bulk mail and corporate mail orders," said an official. "But of late we have even seen a dip in the number of our savings account holders." 

Small savings accounts in rural post offices were a keystone to the department's policy and the department had the largest number of savings accounts across the country. However, this too has now been impacted due to a change in government policy, added the official. "A few months ago, the Reserve Bank of India changed the interest rates of savings account from fixed rates to floating rates. However, this is not applicable for postal accounts. Added to that are electronic services that banks provide. As a result, we have lost 40% of our account holders." 

India Post has only recently begun installing ATM facilities at some its head post offices. But it may be a case of too little too late. Pushed to a corner, the department is now looking at other innovative ways to woo their customers back. "Hence the tie-up with small ventures," he said. "The solar lamps sold very well in Kancheepuram and we are looking at similar ventures. Our primary advantage still remains in our rural network and we will put that to use."