The Post Office of India has evolved from an institution of
‘communication’ in the nineteenth and twentieth centuries to an important
‘financial’ institution of the early twenty-first century. To understand this dramatic change in
functionality of an institution identified with its traditional role of
delivering letters and parcels requires an understanding of postal and
financial history and above all migration history. This is because the Post
Office has been the most important financial institution for millions of
migrant workers over the past century. The 7 billion postal money orders (MOs)
issued over 130 years since 1880 largely represent the remittances sent by
migrants in India and overseas to their families back home.
An article from The IndianEconomic and Social History Review traces the evolution of these key postal
financial services—MOs and small savings—over the past 130 years. It highlights
the role played by the Indian Post Office in fostering financial inclusion in
the twentieth century and how P OSBs eventually emerged in 1882 to extend
banking facilities in the ‘interior of districts. The discussion on MOs
provides the first history of internal and international migrants’ remittances
in modern India. Finally, it illustrates how a banking habit was cultivated
among the unbanked rural masses of the subcontinent.
In 2013, India Post (the new name of the Post Office of
India) generated 60 per cent of its revenues from financial services offered
through the largest postal network in the world consisting of over 154,000
offices, 90 per cent of which were located in rural areas. Faced with stiff
competition from electronic communication technologies that challenge ordinary
mail services, India Post followed the global trend of postal institutions
re-positioning themselves as financial institutions and approached the Reserve
Bank of India for a banking license that would enable it to offer more
financial services.
While the Post Office has, as this article argues, played an
important role in enhancing financial inclusion and development in modern
India, this contribution is surprisingly unknown or unacknowledged. This is
because the literature on the financial history of modern India has largely
focused on lenders, such as, commercial banks and moneylenders. Thus, it argues
that the financial history of modern India remains incomplete without
integrating the Post Office as a key institutional actor.
