If RBI wants financial inclusion, India Post, with its large customer base and branch network, is the fittest candidate
India’s central bank is set to open doors to a set of private and state-run entities in the banking space in Asia’s third largest economy. The objective behind doing this, almost a decade after companies were last allowed to float banks, is the so-called financial inclusion or expansion of banking services in a nation of 1.2 billion people where 40% of the adult population still does not have access to banking. If the Reserve Bank of India (RBI) were to choose one state-run entity to do so, it should be 159-year old India Post. It had 154,822 branches across the country as on 31 March, the latest data available, the largest for any postal department in the world, and close to 90% of them—139,086—are in rural India. This is more than four times the rural branches of Indian banking system. As of June 2012, there are 165 banks in India, including 82 regional rural banks, and collectively they have a branch network of 92,117. Roughly 36% of it, or 33,367, are in rural pockets.