Kolkata: Concerned over the rise in interest rates on deposits by banks, the postal department is seriously considering to enter banking sector by floating Post Bank of India.
Minister for Communication and IT Shakeel Ahmed said the postal department was in talks with the Reserve Bank of India (RBI) and the Finance Ministry for setting up a full-fledged bank.
The minister said that following the rise in interest rates, there has been an outflow of deposits from small savings to banks in urban areas.
He, however, said the scene was different in rural areas where people still preferred to go for deposits in small savings due to its sheer reach.
The postal department has 1.55 lakh post offices across the country.
Ahmed said that the number of post office account holders were double the number of bank accounts of all the banks taken together.
He also said that the postal department was also in talks with the finance ministry for raising interest rates on small savings.