The humble post office is all set to undergo a radical change with a proposal to convert over 1.5 lakh post offices across the nation into full fledged banks on the anvil.
Telecom Minister Kapil Sibal wants to reach out to the masses in the rural areas with modern banking facilities through the post offices.
"We want to commercialise the department. We will seek a licence from the RBI to convert all our post offices into banks," Sibal said.
The lack of modern banking facilities in rural areas and dependence of villagers on informal sector for their credit requirements has prompted the government to work on financial inclusion by way of setting up 'postal banks'.
"The State Bank of India can't build branches all over India, but there are post offices across India. The branches are already there, so infrastructure expenditure is not required. So you can actually give banking facilities at relatively lower costs, which would be extremely beneficial to people," he said.
The post offices currently offer financial services like savings bank, postal life insurance, pension payments and money transfer services. Its total corpus stood at Rs 5,82,832.9 crore as on March 31, 2011.
DoP's revenues grew 11% to Rs 6,954.09 crore in 2010-2011 from Rs 6,266.70 crore in the previous fiscal.
However, negative growth rate in some circles has pushed the Department's deficit to Rs 6,625 crore in FY'11, almost equal to the annual revenue of the Department.
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