State Bank of India plans a tie-up with post offices to expand rural reach

State Bank of India, the country’s biggest lender, plans to partner with the with India Post to leverage the expansive postal network for providing credit and other services in rural areas.
This was announced by finance minister, P Chidambaram, speaking in the Lok Sabha during the debate on the SBI Amendment Bill, which replaces an ordinance for transferring the Reserve Bank’s stake in SBI to the Union Government.
The alliance will bring banking facilities to even the remotest villages. SBI’s 9000-strong branch network is already the largest in the country. If the branches of its seven associate banks were added to the tally, the total branch network would reach 13,000.
However, these numbers look minuscule in comparison to India Post’s network, which has over 1.5 lakh post offices, a majority of which are in rural areas. Post offices in India already offer a host of services such as savings, insurance, mutual funds, pension and domestic as well as international money transfer.