India Post could link up with HDFC

Private sector bank HDFC is looking to increase its reach in the microfinance segment by tying-up with India Post, reports DNA. The article continues;

“Our bank is now evaluating opportunities to tie-up with the postal department to increase our microfinance base in the rural areas of Maharashtra,” a senior HDFC Bank official told PTI.

The official also said that even if the postal department keeps for itself a 3% spread, credit could be extended at not more than 15% interest rate, and the post-offices could lend to the borrower directly.

The government of India has also set up an inter-ministerial group to explore the chances of allowing India Post to set up a savings bank for the same.

“The network of more than 1.5 lakh offices across the country (more than twice the number of all the branches of the entire banking system) has turned out to be perhaps the most valuable resource of the Department of Posts to utilise this service,” the official said.

India Post has already tied-up with National Bank for Agriculture and Rural Development (NABARD) for extending micro credit in Tamil Nadu.