India Post- Change is the only Constant

By Rishabh Diwakar

The world has evolved and entered into a new era of technology, so have many organizations. But those who failed to see the evolution in the world landed in stress. Nokia, once the first choice of the consumer is trying desperately to catch up with its competitors-Samsung and Apple. Sony couldn’t see that the world was moving into MP3 from analog and the internet from tapes when they launched Walkman and Discman. But there are several organizations which keep the pace with the changing world and we envy them. They make the headlines every day and reach their customers every second; trying to remind them and keeping themselves on top: be it FMCG or electronics.

But Department of Post, working as India Post, a government operated postal services, has adopted itself to every change but seldom makes any headlines. It has the greatest network in India and is an epitome of supply chain.

As of 31 March 2011, the India Post had 1, 54,866 post offices, out of which 1, 39,040 (89.78 percent) were in rural areas and 15,826 (10.22 percent) in urban areas. It had 25,464 departmental Post Offices and 1, 29,402 Extra-Departmental Branch Post Offices. At the time of independence, there were 23,344 post offices, primarily in urban areas. Since independence the network has seen a six-fold growth, with focus on rural areas. On an average, a post office serves 21.23 Km and a population of over 8000. Because of its far-flung reach and presence in remote areas it is also involved in other services, such as financials.

When we say post office, the first thing that comes to our mind is a person, wearing khaki, traveling on his bicycle, delivering letters, spreading happiness i.e., the postman. We can visualize the long inland letters and postcards which we used send to our beloved and all those romantic letters bring a smile on our face. However, with the emergence of email deep penetration of mobile telephony, people stopped using postcards and writing letters. The phase out of telegrams from July 15 is another warning to India Post. It’s just a matter of time when physical letters will completely be replaced with electronic media and the Post Boxes will become a history.

Also, many courier companies have also emerged with the latest technology and a better delivery system which have added to the woes of post office. You can imagine the loss to the Postal services. But India post stands still in its position by adopting itself to the latest technology. In 2012, India Post modernized its system to keep up with the pace and remain in competition. They have found other source of revenue to keep going; in fact they have diversified themselves into Mutual funds and other financial services.

Now, they are rubbing their shoulder with TATA and Birla, by applying for new commercial banking licenses. And India Post is unbeatable in this, with over 1.5 lakh post offices across the country-90 percent of which are in rural areas. The biggest bank SBI has just over 15,000 branches which is nothing, as compared to India Post. The objective of new banking licensing is improving financial inclusion; hence, the India Post remains much ahead in the race. India Post being a government department, RBI should not have any problem with its financials. People are very much familiar with post offices and already do some financial transactions with it so credibility would not be any issue. But the real challenge is getting the right people to run a bank and putting themselves out of reach of the government.

Be ready to swipe your Red Card for cash rather postcard or inland. India Post is just one step ahead of getting the new banking license and it has already one customer in queue: Me!!

Rishabh Diwakar is an electronics engineer and is currently pursuing full time M.B.A in Energy and Infrastructure (Finance) from School of Petroleum Management, Gandhinagar. In past he has been associated with Tata Consultancy services Ltd for 3 years as a system engineer. He has also done research work for Indian Oil Corporation during his Internship and helped them to understand the role of media in branding.