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KPMG to advise govt on revamp of postal dept
March, 05th 2007
The Central government has appointed KPMG as consultants for revamping activities of the Department of Posts, a senior official said here today. 
The government is awaiting a report from KPMG. However, one of the recommendations of KPMG is to set up Post Office Banks similar on the lines of Japan, which has been successful, the official said. 
But the only hitch, the huge investment needed for starting a bank and a nod from the ministry of finance. 
Postal banking has deposits of a whopping Rs 3 lakh crore and the Maharashtra circle has Rs 37,500 crore, the official said. 
The amount is given to the Auditor General every month. And then the Central government lends to the state governments at 9 per cent interest for their monthly expenses, she said. 
But with falling interest rates, the state governments tend to go for loans from banks than from the Central government, the official said. 
The opening up of mutual funds and higher rate of returns from banks has started to affect the post office savings schemes, the official said. 
People are withdrawing from our Kisan Vikas Patra and National Savings Certificate because they find the returns from mutual funds and banks attractive than ours, the official said.
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