Notwithstanding the plans to extend and modernise the postal financial services across the country, Bangladesh is actually lagging behind in doing so. Due to innovation of information technology and digitalisation, along with the aggressive move by private players, core activities of post offices have already shrunk. For example, private courier services have taken away the big chunk of parcel and packet deliveries.
Bangladesh is the pioneer in introducing postal-based debit card and post office automated teller machine (ATM) in South Asia. Its electronic money transfer (EMT) service, which won 'mBillionth Award South Asia 2011' for introduction of mobile money transfer service, is also a great leap forward in financial inclusion activities.
Thus, Bangladesh Post Office (BPO) is also trying to cope with advancement of technology by adopting many things to improve services, especially the financial services. A wide network of around 10,000 post offices and sub-post offices across the country is its fundamental strength to provide better financial services along with other services. Several newspaper reports in the last few weeks, however, unveiled disappointing progress in this regard.
A vast majority of the post offices in Bangladesh are situated in old buildings or vulnerable premises, and thus are not suitable for installing modern facilities. Keeping this in view, a project was taken to refurbish 1,500 old post offices and construct 1,000 new ones, mostly in rural areas. Approved in 2012, it was initially scheduled to complete by 2013. Later, the deadline was extended to 2017. But lacklustre bureaucratic moves resulted in dismal outcome so far.
The most important part of the project is allocation of fund for acquiring lands for building new post offices. The government has allocated Tk 50,000 for three decimals of land per new post office. In reality, it is very difficult to purchase three decimals of land in most of the places with such a tinny amount. So, it becomes very difficult for the postal authority to purchase or procure lands to construct new posts offices. Nevertheless, the authority is optimistic to be able to build some 250 new and repair 500 old post offices within this fiscal (FY16).
In the current year's budget speech, the finance minister also declared that the government would set up some 8,500 post-office based e-centres across the country by 2017. So far, progress is not satisfactory and it is unlikely to meet the deadline.
The popular EMT service has already lost its market to private players, led by bKash, an initiative of Brac Bank. To regain some parts of the market, BOP has reduced service charge of EMT service as well as decided to appoint agents. Being a state-owned organisation, post offices are not open seven days of week. As there is no institutional and individual agents, people have to take the service from post offices only, while bKash provides seven days service through agents and outlets.
In reality, all these reforms and modernisation projects are facing lots of barriers due to inherent structural weaknesses of the postal department. Like other state-owned enterprises or bodies, post offices suffer from the dearth of skilled and efficient manpower. Most of the employees have very little or no knowledge of information technology. They are at ease with their typical mode of manual operations, and so are not enthusiastic, if not indifferent, to any modernisation move. Irregularities and corruption are also there. For instance, the postal authority tried to undertake some promotional or campaign activities to widely inform the people about EMT, ATM and postal cash card services. But, it failed as politically backed employees union and some other groups intervened to grab the work for their own business. In the process, several attempts did not see the light of the day, and as a result, postal authority now virtually depends on newspapers and electronic media to disseminate information about its services -- that indeed at high cost.
ATM and postal cash card is another sorry tale. The BPO tied with Sonali Bank, country's largest commercial bank, for co-branding ATM service. Moreover, some 3,000 ATMs of 33 commercial banks are also supposed to facilitate postal cash card through the Q-Cash payment gateway. But, most of the ATM booths of Sonali Bank are dysfunctional. There are some 1,400 point-of-sales (POS) machine in different post offices to issue the card, but most of the POS are inoperative. Thus, people have lost interest in the postal cash card. Launched in 2011, the number of cash card subscribers was 36,000 in FY12. In later years, it gradually declined and came down to only 4,000 in FY15.
The dismal state can be well understood if we look at the Indian postal financial service which has been able to cope up with technology excellently well and is gradually expanding its coverage. Within two years from 2014, the number of ATM booths based in Indian post offices increased to 850 from only four in 2014 and may reach 1,000 this April. Currently, some 21,000 post offices have been brought under the core banking system. Thus, customers will be allowed to operate their accounts from any of these post offices. It is interesting to note that the State Bank of India (SBI), India's largest commercial bank, have some 16,400 core banking-enabled branches across the country. Core banking solution is a networking system of bank branches, which enables customers to operate their accounts, and avail banking services from any branch of the bank on the network. Under the system, it is not important where a client maintains his/her account. He/she becomes the bank's customer, not of any particular branch.
India Post has already received a licence from the Reserve Bank of India (RBI) for starting a Payments Bank. It is also seeking permission to allow all postal ATMs to work on the platforms of all other banks. This is known as interoperability of ATMs. Moreover, India has a plan to set up 10,000 postal ATMs in the next couple of years along with some 20,000 micro ATMs. In the long run, there will be one ATM each in all the .15 million post offices across the country of which .13 millions are in rural areas. No doubt, India's plan to push the postal financial services is quite ambitious and indeed challenging to fully materialise.
In Bangladesh, the condition is still favourable to modernise the post offices and push for the postal financial services. Postal department has the biggest network across the country that no other state-owned body has. Post offices also have a keen sense of attachment with rural people. So, some serious effort is needed to move ahead with postal financial services. It requires adequate investment and timely implementation of the projects. Irregularities and corruption should be checked by establishing good governance. Also, it requires sufficient safeguard against any technological glitches. And of course, website of BPO should be updated first to give the impression that it is moving ahead.
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