The Hindu : National : Department of Posts-SBI tie-up helps rural banking expansion

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Sunday, Dec 30, 2007
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Department of Posts-SBI tie-up helps rural banking expansion

Sandeep Joshi

Pilot project, functional in 5 States, being extended to other States

Smart cards are being issued to account holders
Rural post offices are being electronically linked with bank

NEW DELHI: The Union government’s aim of extending banking facilities in the rural hinterland is now being achieved by the Department of Posts, thanks to its tie-up with the country’s leading banker -- State Bank of India -- to provide latter’s products and services through its wide network of post offices spread across the country.

“As a pilot project, we started in July this year from villages in five States – Karnataka, Andhra Pradesh, Tamil Nadu, Maharashtra and Jharkhand – extending facilities being offered by the State Bank of India to its customers through our post offices.

Various transactions

Any SBI account holder can carry out various transactions like depositing money or its withdrawal from our designated post offices,” Department of Posts Secretary IMG Khan told The Hindu.

“Now, we have started these services in Rajasthan, Madhya Pradesh and Kerala also, gradually covering all our rural post offices. Smart cards are being issued to account holders having all their information and banking details that are acceptable at our post offices. Our rural post offices are being electronically connected to nearest SBI branches, making it a unique model of rural banking.

“From simple transactions like depositing and withdrawing money, the plan is to gradually offer all the SBI products and services to rural people, including various types of loans; ATM, debit and credit cards; and savings products like bonds, recurring and fixed deposits. Soon, villagers would also be able to deposit gold to get short-term loans on very marginal rate of interest,” said Mr. Khan.

Experiment succesful

According to the DoP Secretary, the experiment has so far been very successful as more and more villagers are now coming to post offices for their banking-related work.

“Villagers are not only confident in approaching us due to our long association with them, they are also finding it as a very useful and convenient service.

Comprehensive drive planned

In fact, we are now planning to launch a comprehensive drive to open new accounts in rural areas and inform people about this unique initiative.

“We have a wide network of over 1.5-lakh post offices spread across the country, out of which almost 1 lakh post offices are located in rural areas. We are planning a national rollout of this venture and hope to offer this service in all our rural post offices within the next couple of years. Keeping in mind our vast reach, this venture will definitely show some interesting results, besides help Reserve Bank of India in achieving its goal of offering banking service in rural areas as well,” Mr. Khan added.

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