300% rise in deposits in 2 years, 23 lakh accounts opened in 2018 in A.P. Circle

Date : 15.04.2018

300% rise in deposits in 2 years, 23 lakh accounts opened in 2018 in A.P. Circle

The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, seems to have a positive impact on the Postal department, if the increase in the total deposits in post offices across the Andhra Pradesh Circle in the last two years is any indication. People are apparently switching over to Postal service from commercial banks fearing flight of their savings.

The total deposits touched ₹16,132.28 crore in 2017-18 against ₹14,947.24 crore in 2015-16 financial year. The net deposits stood at ₹2031.78 crore in the last fiscal compared with ₹507.13 crore in 2015-16. The number of accounts being opened in the post offices has also increased considerably. Five lakh accounts were opened during 2017-18 financial year alone.

Though the Postal department did not conduct any study on the reasons for the ‘impressive growth in accounts and revenue’, senior officials, in private, say that the FRDI Bill is one of the factors, apart from attractive schemes. The number of term deposits increased to 7,09,642 in 2017-18 from 4,46,837 in 2015-16, they point out.

Bank reserves hit

On the other hand, bank officials also say that the proposed FRDI Bill has affected their cash reserves as customers, in general, preferred to withdraw cash from their accounts. “People seem to have developed some apprehensions about parking their funds in banks in the light of the FRDI Bill. They are looking for alternative investment avenues,” opines a senior official of Andhra Bank, who didn’t want to be quoted.

When contacted, Assistant Postmaster General (APMG) Jaffer Sadiq says post office deposits have been attracting incremental inflows. On an average, 1.9 lakh accounts were opened per month during the last fiscal. The figure rose to 2.8 lakh per month if the period from January to March 2018 is considered. A total of 22.77 lakh accounts were opened during the last fiscal, he says.

As many as 13,83,579 new savings bank accounts have been added in the last two years taking the total to 62.83 lakh accounts in 2017-18 as against 49 lakh in 2015-16, says Mr. Sadiq.

Except recurring deposits and monthly income scheme (MIS), all other major schemes have recorded a positive growth. A huge number of RDs and MIS accounts matured during the last two years, hence the negative growth. The interest rate on RD and MIS was reduced to 6.9% and 7.3% respectively in 2017-18 from 8.4% in 2015-16, he adds.