Tag: India

Post Office may join payment clearance system in India

Posted by | Sep 22, 2007 | |

One of the oldest deposit taking institutions — the Post Office — may well get to provide seamless fund transfer, with an RBI panel recommending that the Post Office be linked to the clearing system and the National Electronic Fund Transfer (NEFT). The panel has also sought to keep smaller banks with a net worth of less than Rs 50 crore out of the NEFT.

Section 49A of Banking Regulation Act empowers the Centre to notify institutions to accept deposits withdrawable by cheques. Post Office Savings Bank falls under such specific notification issued by the Centre. “Such notified institutions are providing chequeable accounts to their constituents.

In order to facilitate better customer service, such notified institutions should also have access to the clearing system,” said the report on ‘Working Group on Preparing Guidelines for Access to Payment Systems’. At present, banks have an advantage over the Post Office Savings Bank since they can provide fund-transfer facilities to customers. Those with core-banking solutions can extend online fund-transfer facility to their customers through internet banking.

At present, the Post Office is in the process of computerising and networking head post offices. By the end of the year, the Postal Department expects to network 650 of head post offices. Once the various locations are networked and the Post Office itself is plugged into the NEFT system, the POSB (Post Office Savings Bank) would be in a position to offer fund-transfer services similar to banks.

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The Reserve Bank of India brake on Western Union growth

Posted by | Sep 20, 2007 | |

The Reserve Bank of India (RBI) has asked international money transfer agent Western Union Co. Ltd to stop expanding its network in India till it receives “further instructions” from the central bank, which also doubles up as the regulator of the banking and foreign exchange business. The company operates in India through a network of principal agents and sub-agents.

A government official, who did not wish to be identified, said the central bank found that Western Union Services India Pvt. Ltd (Wusi) was deviating from what it is actually allowed to do in India. The official declined to specify what these activities were.

In a letter dated 5 September, a copy of which is available with Mint, RBI has prohibited “Indian agents of Western Union Financial Services Inc., USA/Western Union Network (Ireland) Ltd” from expanding their wire transfer business in India through sub-agents. The letter does not mention any violations of service terms, and adds that “MTSS (money transfer service scheme) guidelines are being comprehensively reviewed in consultation with the government”, and that the bank expected to be able to issue the revised guidelines “shortly”.

But the letter adds that “any breach of these instructions” on not expanding the network “will be viewed seriously and render (the) agency permission liable for cancellation.”

A Wusi executive confirmed that RBI sent a letter but not to the company. “Some of our sub-agents have received the letter, not us,” said the executive, who did not wish to be identified. Wusi has 11 principal agents in the country, who have appointed sub-agents. The official said Wusi will not be directly liable for the functioning of sub-agents, who run over 45,000 outlets in India.

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India’s blue dart seeks continued 100 pct FDI in express couriers

Posted by | Sep 17, 2007 | |

Courier major Blue Dart Express has sought continuation of the 100 per cent foreign direct investment for the industry even as the Centre plans to introduce the Post Office Act (Amendment) Bill in the winter session of Parliament.

At present, 100 per cent foreign equity is allowed in domestic express companies. The bill proposes to bring down the ceiling to 49 per cent, raising concerns for the industry.

Foreign companies such as DHL (which holds 81 per cent in Blue Dart), FedEx and new entrants such as TNT have substantial interest in the growing Indian market.

“The bill in the current form is retrograde. On one hand, the government wants more FDI by opening up the economy and on the other, you take a step backward. If there was no FDI allowed in the sector from the beginning, then any limit, be it 49 per cent or more can be considered. But if there is already 100 per cent FDI allowed, why go back? People have invested huge amount of money in the sector under this policy,” Blue Dart MD Anil Khanna said.

Postal department officials said the bill could be introduced in the winter session of the Parliament. It is preparing to move Cabinet for approval.

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India: Postal dept liable to pay for late delivery

Posted by | Sep 17, 2007 | |

The postal department is liable to compensate a consumer for not delivering a consignment within the stipulated time as assured under it Speed Post service, the Delhi Consumer Commission has held.

Rejecting the department’s plea that the Indian Post Office Act gives it immunity from paying compensation for any delay in delivering articles, the Commission, presided over by Justice J D Kapoor, said it was liable for any “deficiency in service or negligence”.

“The immunity under the law of any office or of any government authority has nothing to do with the concept of compensation to a consumer due to the negligence of the opposite party (post offices) in not maintaining the standard of service,” Justice Kapoor said.

Allowing the appeal of complainant Yatendra Sharma, the Commission observed in a recent order that the department could be saddled with liability for non-delivery of postal articles within the stipulated time under its special Speed Post scheme.

“Whenever any consumer avails service like Speed Post or courier and if there is any shortcoming or inadequacy in the manner of performance, the service provider can be held guilty for deficiency in service,” it said.

The Commission’s ruling came in response to an appeal by Sharma, a resident of Sahibabad in Uttar Pradesh, who sought compensation for the delay in delivering a consignment, sent through Speed Post to Singapore in 2002.

A consumer forum had quashed his complaint on the ground that the postal department was immune under a statute from paying any compensation on this ground.

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