In a move revolutionalising the small-savings market, the department of posts (DoP) has, in principle, decided to dematerialise postal savings instruments. The government mobilises in excess of Rs 50,000 crore annually on net basis through small-savings instruments. The decision is significant as the amount mopped up through various postal savings schemes is more than double the mobilisations by the domestic mutual fund industry, and takes the paperless environment to the last mile of class of investors ‘ rural masses.
DoP, under the ministry of telecommunications, runs the small-savings schemes in coordination with the national savings organisation (NSO), which comes under the ministry of finance (FinMin). The schemes are: savings bank account scheme, recurring deposit scheme, time deposit with different maturities, monthly income scheme (MIS), public provident fund (PPF), kisan vikas patra (KVP) and national savings certificate (NSC).
Mr Arun Shourie, heading the telecom ministry, has convened a meeting of senior officials of DoP and Reserve Bank of India (RBI) and Mr CB Bhave, managing director of National Securities Depository Ltd (NSDL), on August 16 in New Delhi as it prepares to launch a pilot project on dematerialisation of KVP and NSC schemes. Based on the success of the pilot project, a final decision with respect to covering all postal securities will be taken, said sources. The meeting will also deliberate on the issue of charges to be levied on investors.
The pilot project is expected to take off within three to six months of the final approval from the ministry as the work to be undertaken is large in nature, considering that more than 2 lakh post offices are spread across the country.
Also, it is going to be a complicated one as only in the case of MIS, there are more than 10 lakh accounts, of which two lakh accounts are only in Mumbai.
Last week, Mr Shourie had a meeting with senior officials of PoD of the Maharashtra circle, senior RBI and NSDL officials along with small savings agents under the aegis of the Investors’ Grievances Forum in Mumbai. Mr Shourie was apprised of the benefits of demat of postal securities and how they will help DoP to cut costs while eliminating paper.
It was argued that the paperless environment will not only help investors but will also facilitate internet-based buying and selling of postal securities in the long term.
Through various small-savings scheme, the government raised Rs 1, 15, 000 crore for the year ended March 31, 2003. On net basis, the mobilisation was Rs 57, 000 crore. West Bengal led the states in small-savings mop-up, raising Rs 14, 295 crore on gross basis. On net basis, it raised Rs 7, 679 crore. Uttar Pradesh was at number two, with a mop-up of Rs 11, 580 crore. On net basis, it raised Rs 4, 936 crore. Gujarat raised Rs 9, 762 crore, with net mobilisation at Rs 4, 911 crore. Maharashtra was in the fourth position as far as net mobilisation was concerned, which was at Rs 4, 704 crore. In terms of gross mobilisation, at Rs 10, 834 crore, it was at number three. Andhra Pradesh, Tamil Nadu and Karnataka were at the fifth, sixth and seventh positions on the table for the period ended March 31, 2003.
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