Small savings in West Bengal may once again take a hit with chief minister Mamata Banerjee’s move to marginalise ponzi schemes by launching an investment scheme by state-run NBFC.
Earlier, small savings in the state were hit by the mushrooming of ponzi schemes. The state-level bankers’ committee (SLBC) reported that post office deposits fell to a meagre R157 crore in FY12 from R12,000 crore in FY11. Deposits in small savings improved after the government initiated action against the ponzi menace. But there are fears they will fall again after the state floats its own scheme.
The proposed ‘Safe Savings Scheme’ (to be managed by West Bengal Infrastructure Finance Development Corporation (WBIDFC) along with four banks— SBI, UBI, Allahabad Bank and UCO Bank), plans to offer higher rates than the National Savings Certificates (NSCs) issued by post offices.
This can divert the chunk of post office investors towards the state-managed scheme.
NSC rates at present vary between 8.4% and 8.8%, depending on the term of deposit. They were brought down from last year’s 8.5-8.9%.
WBIDFC chairman Abhirup Sarkar said by no means the proposed scheme would compete with bank rates. “But we are going to offer more than what the post offices offer in NSCs,” Sarkar said. He agreed that the goverment scheme could take away a good deal of business from the post offices.
While the four banks would accept deposits, the success of the scheme would rest on collection agents, who would go to individuals to convince them and collect deposits. The state plans to engage 24,000-odd postal agents to the scheme, who would also be offered higher commission then the average 0.5% postal commission.
The Union government, based on the Shyamala Gopinath Committee’s recommendations, slashed post office agents’ commission in 2011 to save R2,400 crore on deposits. Banerjee’s move is also aimed at compensating the post office agents in the state.
The SLBC is, however, doubtful about the success of the scheme mainly on two counts. First, the cost of deposits and, second, the returns the government is expecting from deploying the fund. The cost of deposits would