Can A Digitized Post Realize India’s Financial Inclusion Dreams?

A giant effort is currently underway to digitize India’s postal network, which although seen by many as a little antiquated, is a trusted public institution in rural areas. India’s postal network is the largest in the world with over 155,000 post offices, and about 140,000 of those are in rural areas; more than the total number of bank branches in the country. The postal service offers savings, mutual funds, life insurance, and domestic and international remittances through money orders.

However, several features of the postal service preclude it from being a bank. Accounts are not connected to the core banking server (CBS), making it a closed-loop system. Additionally, the post office does not offer credit.

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