The postal department and the State Bank of India (SBI), are gearing up to take basic banking services to the doorsteps of millions of people in rural areas who have no access to the country's banking system. The tie-up will see postmen acting as banking correspondents for SBI in over 12,000 villages, collecting deposits and offering small credit and remittance facility to people in far-flung areas. Villagers in these areas currently have no option but to keep hard-earned money at home, losing out on interest and running the risk of theft.
SBI, which has around 5,000 branches in rural or semi-urban areas, hopes to cover 12,492 villages by 2012. The business correspondent model, set up by the Reserve Bank of India, allows specific individuals and entities such as 'kirana' shop-owners , NGOs and post offices to conduct banking business as agents of banks at places other than the bank premises.
India Post has a network of over 1.5 lakh branches.
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