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Thursday, March 31, 2016

Investor rush to lock into high rates crashes computers at Post Offices

MUMBAI / NEW DELHI: Computer systems of post offices across the country have been hit by unprecedented year-end rush to open new public provident fund and senior citizen scheme accounts and deposit money in existing accounts, prompting the government to order contingency measures such as acceptance of deposits offline.

On Monday, the computer system connecting the country's 20,500 post offices — which reopened after a four-day holiday — witnessed a major slowdown, prompting the new set of instructions that speeded up processing. There were fresh glitches on Tuesday that inconvenienced depositors but officials said the problem was resolved by late afternoon. A fresh set of instructions on accepting reinvestment would be issued on Wednesday.

While there is always a year-end rush to claim tax benefits on investments, this time the problem is more acute due to the four-day holiday and the government's decision to lower interest rates on small saving schemes by more than a percentage point in some cases. With those putting money in Monthly Income Scheme, Senior Citizen Schemes or National Savings Certificate assured of locking in their investment at a higher rate for the next few years, the queues are longer this year.

Adding to the post office woes was the fast rollout of core banking platform across the country, which had been facing problems as it had not yet stabilized. The post office has been migrating all savings accounts on to the core banking system. The number of computerized post offices has increased to 12,000 in December 2015 from 2,000 at the end of December 2014. And in the last two-and-a-half months, it has grown to 20,000 from 12,000.

"We have allowed all post offices to accept deposits offline. This will free up a lot of capacity for withdrawals and reinvestment, which need to be checked from the system. We are trying to ensure that we are able to deliver service to everyone," said L N Sharma, India Post's deputy director general in charge of financial services. He added that any investor who faces a problem should contact the Superintendent through the post office as systems have been put in place to escalate the problem at the department of posts.

Customers in various states, including Maharashtra, Delhi, Gujarat, Telangana, Himachal Pradesh and Madhya Pradesh, complained of computer downtime in post offices. "It looks like the post office is also having some problem with reconciliation of their numbers. Several people have received communication asking them to check whether interest is being correctly credited into their accounts," said a small savings agent.

Some customers have complained that their names were inputted incorrectly resulting in reviving certificates with spelling mistakes. There were concerns that this could lead to problems while withdrawing funds a decade later. In Maharashtra, the Postmaster General at Pune said that the Finacle core banking system, set up by Infosys, was experiencing problems due to which members of public were facing difficulties in conducting their transactions.
Source : The Times of India

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