The finance Ministry is not in favor of allowing the Indian Post to get the banking license, but RBI governor Raghuram Rajan said yesterday, there is possibility that Indian post can be given limited banking license. Indian post can work as a bank, but will offer only specified and limited services.
Indian post will only be allowed to raise deposits and offer payment and remittance services, and further the entire amount would be have to be parked in government securities. The post banks will be working as the payment banks to raise deposits and make payments. This measure to establish the Post office as the payment banks will help the govt. in various capital related issues. There are more than 1.5 lacs post offices across the country that is much more than the extensive network of SBI. With these vast numbers of Post offices banking services can be made accessible to the people easily. Mr. rajan also stated that Small banks tend to be better at catering to local needs, including needs of small and medium businesses.