Post offices to be linked to bank network, ATMs

Mumbai: In a bid to help expand the reach of financial services to the last mile, the Union Budget 2022 announced bringing 1.5 lakh post offices into the core banking system, and setting up digital banking units (DBUs) in 75 districts, to mark 75 years of Independence, by scheduled commercial banks.

“In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and provide online transfer of funds between post office accounts and bank accounts. This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion," said finance minister Nirmala Sitharaman said.

Currently, post offices provide savings account services and payments bank services through the India Post Payments Bank.

The minister also announced setting up 75 digital banking units (DBUs) in 75 districts by scheduled commercial banks.

Ashish Singhal, managing director of SVC Co-Operative Bank, said, "Connecting post-offices to the core banking system will help reduce the distance between urban-rural economy."

Ketan Doshi, managing director of PayPoint India, said, "The move to connect 150,000 post offices in India to the core banking system, allowing people, especially in rural areas, to access their accounts online and transfer money within post office accounts and other banks will deepen financial inclusion."