The government’s plan to tap into India’s vast postal system to reach out to the unbanked population by utilising offices across the country as banks is expected to take some shape this year as the proposal has been sent to the finance ministry for its nod.
The idea that 1.55 lakh post offices could double up as banks is aimed at aiding the government’s goal of financial inclusion, especially in rural areas. Once implemented, coverage of India’s banking network will increase three-fold in one stroke.
Around 90% of the post office branches are in rural areas. In contrast, out of approximately 87,000 bank branches in the country, around 24,000 are in rural India. India post is the biggest postal network in the world, a major portion of which, about 1.4 lakh post offices, are located in rural India.
Although the idea has been around for a while, communications minister Kapil Sibal brought it centre-stage in July.