India’s public sector banks possess one of the world’s widest financial networks, yet a significant opportunity remains underutilized. While citizens seek safe, higher-yield government savings instruments, access to many of these schemes is still confined to post offices—whose numbers are steadily shrinking in key commercial hubs. It is time to rethink distribution, modernize access, and place public sector banks at the heart of India’s savings ecosystem.
Government Savings Schemes: Higher Returns, Limited Access
Several government savings schemes offer interest rates superior to bank fixed deposits. Yet, among public sector banks, only Senior Citizen Savings Scheme (SCSS) and Public Provident Fund (PPF) are widely available—and even these lack the newly introduced facility of Successive Nominations. Meanwhile, other high-interest instruments such as Sukanya Samriddhi Yojana, National Savings Certificate, Kisan Vikas Patra, Mahila Samman Savings Certificate, and Post Office Monthly Income Scheme remain largely post-office exclusive.
Shrinking Post Offices, Growing Inconvenience
Urban consolidation has led to closures of post offices in several commercial zones, forcing citizens to travel long distances for basic postal and savings services. This reality strengthens the case for enabling all government savings schemes across every public sector bank branch, ensuring convenience, inclusion, and better utilization of existing banking infrastructure.
A Public-Sector-First Approach to Insurance & Postal Services
Public sector banks should champion public sector institutions:
- Mandatory LIC counters at bank branches to promote trusted life insurance.
- General insurance desks for public sector insurers, ensuring accountability under RTI.
- Speed Post booking counters within spacious bank branches, generating commission income for banks while easing the public’s access to postal services.
Successive Nominations: A Game-Changer for Depositors
The Banking Laws (Amendment) Act, 2025 introduced up to four Successive Nominations for bank accounts and lockers—a landmark reform that reduces disputes when a nominee predeceases the account holder. This progressive feature must be extended to all government savings schemes, DEMAT accounts, and even deposits with private firms and companies. Such a move would drastically cut litigation, save time and money, and bring clarity to succession.
DEMAT Accounts & Private Deposits: Closing the Gap
Despite strong investor demand, Successive Nominations are still absent in DEMAT accounts. Select (or all) public sector bank branches should offer DEMAT facilities with this feature. Additionally, making nominations compulsory for private deposits—audited and disclosed—would safeguard depositors and strengthen governance.
Less Litigation, More Trust
Widespread adoption of Successive Nominations would significantly reduce court cases, easing the burden on India’s judicial system and protecting families from prolonged disputes. Concerns about rare edge cases should not stall a reform that benefits the vast majority. Depositors can always opt for legacy nomination structures if they prefer.
The Way Forward
If new legislation is required to extend Successive Nominations beyond banks, it should be enacted without delay. The objective is simple: make public sector banks the single, trusted gateway for savings, insurance, investments, and essential postal services—delivered efficiently, transparently, and inclusively.
About the Author
Subhash Chandra Agarwal is a Guinness World Record holder for writing the most letters and a noted RTI consultant.
