Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

Financial Services Provided By the India Post - An Overview

*A.Rajeswari
*Ph.D Research Scholar, Department of Management Studies, Manonmaniam Sundaranar University,
Tirunelveli.
Abstract:
Financial services are crucial to the functioning of an economy. The impact of liberalisation accelerates
the Indian financial service sector, opened the door for emergence of a number of financial service
providers. It increases the competition among the financial service providers, by differentiation its
product and services from those of its competitors. India Post is meant for communication service since
from 1727, which starts providing financial services from the year 1880, as an agency service by the
Government of India. With this backdrop, how the customers select India Post as their financial service
provider is a decisive issue. Therefore to study the financial services offered by the India Post in the
customers view is taken for the study.
Keywords: Financial services, India post, Customer perception.
Introduction
Financial services are fundamental to the economic growth and development. It bridges the gap between
savers (those who got surplus amounts) and those who need fund (the fund borrowers). The India Post
generally referred as post office, has also traditionally served as a financial institution for millions of
people in India.
For more than 150 years post office has been the backbone of country and it has a vast network
of 1.55 lakh post office branches spread all over the country. Over the time the role of post office has
been grown to provide the best investment avenue options to the investors with a very nominal amount
on opening account. It plays a significant role in developing economy. Financial inclusion has been the
key element of developing society and socio-economic development. The role of post office is very
important in developing the economy by providing various financial services to all the sections of the
society.
Financial services offered by India post:
India Post has been offering a host of financial services to the citizens of the country for several
decades. They are explained as follows:
I. Banking Services: Post office saving bank (POSB) in India was established in 1882 by British
Colonizers to Mobilizes savings and operate as an agency for the ministry of finance Act of 2000. The
schemes offered by POSB at present are: Savings Account, Recurring Deposit, Time Deposit Account,
Monthly Income Scheme, Public Provident Fund, National Savings Certificate, Senior Citizen Savings
Scheme, Kisan Vikas Patra and Sukanya Samriddhi Account.
II. Insurance Services: Postal Life Insurance (PLI) was introduced in 1884 and the Rural Postal Life
Insurance (RPLI) was introduced in 1995. These insurance schemes provided under PLI and RPLI are:
Whole Life Assurance, Convertible Whole Life Assurance, Endowment Assurance, Anticipated
Endowment Assurance, Joint Life Assurance, 10 years RPLI and Children Policy.
III. Money Remittance Services: The remittance services of India Post are available for both domestic
and international locations. The remittance services offered by India Post are: Money order, Electronic
money order, iMO (Instant Money Order), MO Videsh, International Money Transfer Service and
MoneyGram International Money Transfer Service.
IV. Forex services: India Post, in association with HDFC Bank, provides Forex services through select
Post Offices across India. The Forex services offered are: Foreign currency notes (Buying/selling),
Travellers cheque (Buying/selling), store value card (Selling), Arrangement of Demand Draft (Selling),
and Arrangement for Telegraphic/ wire transfers (Selling).
V. Mutual fund services: From the year 2001 onwards, the select schemes of Principal, SBI, UTI,
Franklin Templeton and Reliance Mutual Fund are retailed through designated post offices in the
country.

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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

Review of literature:
G.Ravindran & V.Venkatachalam (2016) in his study made an attempt to study why an investor will opt
a particular investment. The study finds that the main objectives of the sample investors are regular
return and safety and security, followed by tax benefits, capital growth and liquidity.
Kore Shashikant D & R.B.Teli (2015) made an attempt to know the awareness of postal employees
towards postal financial services. The study concluded that there are various financial services
launched by the government but focus is to be put on modernization of working style and
infrastructure, professional approach, proper marketing of services, training to the employees and use
of ICT etc. awareness level of employees is needed to be improved.
Statement of the problem:
India post, by its vast reach and huge experience should have been a market leader in providing
financial services. But it has not reached that position. In Todays situation, financial services market in
India is experiencing innovation, integration and customer oriented focus approach. In more, customers
are becoming highly demanding, creating unhealthy competition and putting excessive pressure on the
service providers. Therefore, the customers choose the financial service providers for different purpose
that may be of service convenience, advanced technology, and the like. Hence the researcher made an
attempt to study the customers perception towards the financial services offered by the India Post.
Research gap:
The focus of previous studies have been around the range of issues like investors attitude, factors
influencing, service quality, customers perception towards the financial services offered by the various
financial institutions. Several studies are concentrated separately on each financial services of India
post. It is to be noted that only very few studies are conducted particularly on the full range of financial
services provided by the India post, specifically no studies are found related to Tirunelveli city according
to the knowledge of the researcher. Hence this study is done in an effort to fill up this research gap.
Objectives of the study:
1. To identify and analyse the factors that influences the customers to use the financial services
provided by India post.
2. To find out the problems faced by the customers while availing the financial services offered India
post.
3. To analyse the opinion of the customers for the enhancement of financial services offered by India
post.
Methodology adopted for the study:
For the present study, primary data has been collected with the help of interview schedule. The
customers, who are availing the financial services offered by the India post, during the data collection
time is selected through the convenient random sampling technique. The sample size is 60 respondents
in Tirunelveli city of Tamil Nadu involved in this study. The statistical tools used in the study for the
purpose of analysis which are Percentage analysis, exploratory factor analysis and Garret ranking
technique.
Analysis and interpretation of data:
Following is the data collected from 60 customer of the India post - financial service in the Tirunelveli
city. Analysis and interpretation is made on the basis of field survey.

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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

Table 1: Socio-Economic profile of the customers

Variables
GENDER

AGE

MARITAL STATUS

EDUCATIONAL
QUALIFICATION

OCCUPATIONAL STATUS

Group

Frequency

Percentage

Male

34

57

Female

26

43

Total

60

100

Up to 30 Years

12

20

Between 31-40 Years

16

27

Between 41-50 Years

17

28

Above 50 Years

15

25

Total

60

100

Single

42

70

Married

18

30

Total

60

100

Up to HSC

12

20

Graduate

23

38

Post Graduate

18

30

12

Total

60

100

Govt. Employee

11

18

Private Employee

18

30

Business

Agriculturist

12

Daily wages

11

18

13

Total

60

100

Upto Rs. 5000

13

22

Rs.5001 Rs.15,000

17

28

Rs.15,001 Rs.25,000

14

23

Rs.25,001 Rs.35,000

12

Above Rs.35,000

15

60

100

Any other

Others

MONTHLY INCOME

Total
Source: Primary data

I. Factors influencing the customers to use the financial services provided by India post
To find out the factors influencing the customers towards the selection of financial services, provided by
the India post, 15 variables were identified by the researcher from the review of literature. The self
designed interview schedule on 5 point Likert scale was test with Cronbach Alpha and face validity
statistics. Further, factor analysis was applied.
i) Reliability Test: Reliability test for the variables were carried out by using SPSS software and
reliability test measures are given below:

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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

Table 2: Reliability Statistics

Variables

Cronbach's Alpha

N of Items

.731

15

All variables

The Cronbachs Alpha value is .731 this value is more than to standard value of Cronbachs Alpha value
is .7, it mean the data collected is reliable.
Table 3: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.723

Bartlett's Test of Sphericity

Approx. Chi-Square

396.089

df

105

Sig.

.000

The KMO measures the sampling adequacy should be greater than 0.5 for satisfactory factor analysis to
precede. The KMO and Bartlett's test of sphericity indicates that the data is suitable for factor analysis.
ii) Factor analysis:
Factor analysis was carried on after the reliability test. The factor analysis resulted is 4 factors using
the Principal Component Analysis- extraction method, Varimax with Kaiser Normalization - Rotation
Method and Rotation converged in 5 iterations. The details about factors: the factor name and its Eigen
value are given in the table 4.
Table 4: Factor analysis statistics

Factor name

I. Convenience

II. Reliability

Initial Eigen
Value
Total

4.21

3.09

% of
Variance

28.08

20.62

III. Responsiveness

1.60

10.70

IV. Ease of use

1.36

9.04

Variables

Loading

Location of the PO branch situated

.840

Operating hours to access the service

.825

Time taken to deliver the services

.808

Technology driven services

.753

Complaint redressal system

.753

Reliability of the services

.784

Reputation of the India Post

.783

Variety of financial services offered

.781

Agents service is good

.762

Efficient customer service

.683

Mass
media
activities

.636

advertising/promotional

Services delivered at the Doorsteps

.830

Responsiveness of the staff

.829

Procedures for starting the new service

.850

Service charges levied

.831

Source: Primary data

From the table 4, it inferred that the Convenience factor has emerged as the most important factor with
a total variance of 28.08 percent. Followed by the Reliability has a total variance of 20.62 percent,
Responsiveness has a total variance of 10.70 percent and the Ease of use has a total variance of 9.04

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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

percent. Thus the factor analysis condensed and simplified the 15 attributes and grouped them in to 4
attributes explaining 68.461 percent of the variability of all the attributes.
II. Problems faced by the customers:
The following table narrates the problems faced by the customers while using the financial services
provided by the India post.
Table 5: Problems faced while using the India Post- Financial Service
Problems

Frequency

Percentage

Too many formalities

10

16.7

Delay in processing

44

73.3

Absence of personalized services

17

28.3

Lack of proper guidance

12

20

Inadequate information about financial services

15

25

High penal charges

18

30

Computer related problems often exist

38

63

Absence of value added services

35

58.3

Source: Primary data (Multiple responses)

Table 5 shows that, out of 60 sample respondents taken for study, 44 customers have opined that they
have faced the problem of delay in processing, 38 customers have opined the computer related
problems are often exists, and 35 customers have feel that there is an absence of value added services
while using the financial services provided by the India post.
III.

Preferred future changes needed for enhancing financial service:

Today the expectation of modern customer is more. The changes needed for enhancing the financial
services provided by the India post for the customer of Tirunelveli city is analysed with the help of
Garretts Ranking Technique and it has given in table 6:
Table 6: Preferred future changes
S.No

Item

Rank

Percentage
position

Garret
rank scores

Garret
mean score

Garret
Rank

1.

Schemes

8.33

77

35.53

2.

Services

25

63

47.21

3.

Employees approach

41.66

54

50.41

4.

Benefits

58.33

46

55.73

5.

Infrastructure facilities

75

37

53

6.

Technological development

91.66

23

58.1

Source: Primary data

It is evident from table 6, that changes needed in technological development for financial services
provided by the India post occupied the first rank. The second and third ranks are changes needed for
benefits and infrastructure facilities provided by the post office.
Suggestions:
From the finding of the study, the researcher suggests the following:
1. India post may consider the quick rely on technological advancement adopted by the financial
service providers in the market so as to sustain and attract the customers easily.

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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684

2. The India post can introduce appropriate grievance redressal mechanisms and make details available
to the customers and settle disputes within a limited time. It can also introduce advanced technology
which features real-time settlement of enquiries so as to improve the customer service.
3. India post can utilize the services of the advertisement industry and the services of both the print
and visual media to sell its products to customers. As of now it is poorly utilised.
4. India post may consider extensive use of automated machines for speedy processing and to save time
in those areas where it involves manual and repetitive work. This helps to reduce the processing time.
5. In world of modern technology, where financial transactions are becoming web based, the India Post
may consider providing full fledge computer based service by giving proper training for its employees to
operate and to maintain the computer and other electronic devices used for the transaction process.
6. It is highly suggested that the India Post could take efforts to give value added services based on the
need of the customers so as to grown as the competitive financial service provider.
7. The benefits gained by the financial service users of the India post need to be enhanced so as to
attain the competitive advantage among the other financial service providers.
Conclusion: The results of the study concluded that India post have to improve its financial services.
To be successful in Competition with other competitors, it must be ready to offer high-quality IT related
services. More awareness must be created among the people about the schemes introduced and the
reach of the schemes must be checked. Thus in the light of changing environment, India post has to
constantly upgrade its knowledge of the internal and external environment to understand the customer
expectations.
References:
1. Kore Shashikant, D & Teli, R.B. (2015), Awareness of postal employees towards Postal Financial
Services: A Study of Kolhapur district, Contemporary Research in India, Vol. 5(3), pp 154-160.
2. Ravindran, G & Venkatachalam, V (2016), Investment opportunities of postal services sectors in
India, IJARIIE, Vol. 1 (3), pp 226-229.
3. Chinnadorai, K. M. & Sangeetha, J (2014), A Study on Financial Services Provided by Axis Bank:
Customer Perspective (A Special Reference to Coimbatore City), PARIPEX - Indian Journal of Research,
Vol.3 (10), pp 31-32.
4. HimaBindu, T & Meena, G.L (2014), FINANCIAL services In India- an Overview, Asia Pacific Journal
of Research, Vol. 1(14), pp 197-202.
5. Mahesh Potadar, Mehta, & Shubhangi Potdar (2015), Challenges Ahead of India Post A Review,
International Journal of Research in Management, Vol. 1(5), pp.129-136.

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