Citibank to tie up with Postal Dept to collect its money, deliver remittance
Thursday, 20 March 2008
Mahmuda Shaolin
Postal department said Tuesday it has started negotiations with American financial giant Citibank NA to deliver its remittances and make collection on its behalf through thousands of post offices across the country.
The department began the talks with Citibank officials, after it came up with the proposal last week, seeking to use over 10,000 government post offices as its collection booths and remittance delivery centers.
"It's a huge proposal as far as the Bangladesh Post Office is concerned," BPO director general Mobassher ur Rahman said.
"We've started negotiations with them. In its proposal, the Citibank said it wants to use our offices for making collections from its clients residing everywhere in the country," Rahman said.
"They also want to deliver their remittances through all our offices. They would first en-cash the remittance at their branches and then deliver the money through our post offices," he said.
Citibank became the latest in a list of multinational banks and money transfer companies, seeking to use the state-run BPO for money delivery activities across the country.
Initially, the Post Office would start the activities on a six-month test case basis starting from July, he said.
The Citibank officials did not return calls for comments on the report.
The BPO has finalised a similar deal with emerging market giant Standard Chartered, and Rahman said they would sign an agreement with the bank by this week.
The bank has also received proposals from a number of local banks, who want to use its huge network for money delivery and collections.
The BPO chief said the latest tie-up offer is part of a series of reforms his department has undertaken to make full utilisation of post offices across the country.
"Out of our 10,000 offices, only about 1000 offices situated in the cities and towns are fully used. The rest remains underutilised throughout the year," he said.
"We want to change the way post offices operate in the country. We want to make our postmen quick, hard working and efficient," he said.
He said a deal with Citibank would wipe out a big chunk of losses incurred by his department, one of the oldest government offices in the Indian Sub-continent.
The BPO with a strong 40,000 staff incurred losses worth Tk 1.25 billion in the last financial year and was seeking new avenues to make the office break-even by late 2009.
In January, the department signed a ground-breaking agreement with global money transfer company Western Union, under which some 450 post-offices would start delivering money transferred by US company from next month.
Officials said the search of alternate income source follows the gradual poaching of postal services by private courier companies and mobile phones.
The government had early this fiscal year increased the postal tariff between 50--150 per cent, the first time in over 17 years, to cut the losses. But officials said it would bring only Tk 250 million additional revenue.
Postal department said Tuesday it has started negotiations with American financial giant Citibank NA to deliver its remittances and make collection on its behalf through thousands of post offices across the country.
The department began the talks with Citibank officials, after it came up with the proposal last week, seeking to use over 10,000 government post offices as its collection booths and remittance delivery centers.
"It's a huge proposal as far as the Bangladesh Post Office is concerned," BPO director general Mobassher ur Rahman said.
"We've started negotiations with them. In its proposal, the Citibank said it wants to use our offices for making collections from its clients residing everywhere in the country," Rahman said.
"They also want to deliver their remittances through all our offices. They would first en-cash the remittance at their branches and then deliver the money through our post offices," he said.
Citibank became the latest in a list of multinational banks and money transfer companies, seeking to use the state-run BPO for money delivery activities across the country.
Initially, the Post Office would start the activities on a six-month test case basis starting from July, he said.
The Citibank officials did not return calls for comments on the report.
The BPO has finalised a similar deal with emerging market giant Standard Chartered, and Rahman said they would sign an agreement with the bank by this week.
The bank has also received proposals from a number of local banks, who want to use its huge network for money delivery and collections.
The BPO chief said the latest tie-up offer is part of a series of reforms his department has undertaken to make full utilisation of post offices across the country.
"Out of our 10,000 offices, only about 1000 offices situated in the cities and towns are fully used. The rest remains underutilised throughout the year," he said.
"We want to change the way post offices operate in the country. We want to make our postmen quick, hard working and efficient," he said.
He said a deal with Citibank would wipe out a big chunk of losses incurred by his department, one of the oldest government offices in the Indian Sub-continent.
The BPO with a strong 40,000 staff incurred losses worth Tk 1.25 billion in the last financial year and was seeking new avenues to make the office break-even by late 2009.
In January, the department signed a ground-breaking agreement with global money transfer company Western Union, under which some 450 post-offices would start delivering money transferred by US company from next month.
Officials said the search of alternate income source follows the gradual poaching of postal services by private courier companies and mobile phones.
The government had early this fiscal year increased the postal tariff between 50--150 per cent, the first time in over 17 years, to cut the losses. But officials said it would bring only Tk 250 million additional revenue.