Finance Minister P Chidambaram on Thursday inaugurated the country's first Post Office Savings Bank ATM service at Thiyagaraya Nagar Head Post Office (HPO) in Chennai.

After launching the ATM, Mr.  Chidambaram said that the Congress-led UPA government allocated Rs 4,909 crore for the modernisation of Department of Posts in the interim budget for financial year 2014-15.

Speaking on the topic, he said, "The IT modernisation scheme is aimed at making Department of Posts a completely technology-oriented one and today's initiative is a step in that regard."

He added that the government's ambitious IT modernisation scheme, which would be implemented by next year, would cover as many as 1.55 lakh post offices across the country.

He acknowledged that use of letters and postcards is on the decline, but added that a large number of people still believe that Department of Posts offers the best services in courier and parcel delivery areas.

After the launch of Post Office Savings Bank ATM in Chennai, four more ATMs are all set to become operational in Delhi and Mumbai.  The government has plans to install 1,000 ATMs across the country by the end of this year.  Another 1,800 ATMs will be installed in 2015.