Entrepreneurs and Finance Customer Association of India (EFCAI) has urged Reserve Bank of India (RBI) to allow post offices function as Banks. In a memorandum submitted to RBI deputy governor, H R Khan here, the EFCAI has pointed out that India has the world's largest postal network in India with over 1.55 lakhs post offices, out of which 1.40 lakhs are in the rural areas. If the RBI allows Indian Posts to start their own banking operations it will have the potential to emerge as one of the biggest banks in the country and also ensure inclusive growth.

The Indian Posts have 23.70 crore savings accounts having deposits worth of Rs. 56,369 crore.

Access to both banking as well as credit facilities remains a far cry with only 10% population avail credit facilities.

"Against this backdrop, in order to improve the banking system the Govt. of India has plans to seek approval from RBI to enable the Post Offices to start banking operations. Not only will this help the growth of the primary sector but will also ease the pressure on the existing commercial banks to a large extent. The recent expert committee report makes a strong case for harnessing the post office savings bank for achieving financial inclusion as the reach of post offices is twice as extensive as that of all commercial banks put together", the memorandum said.

Referring to Orissa situation, the memorandum said, financial inclusion is a major challenge for the state government with over 60% of the people of the state having no access to the banking systems at all.

The primary sector in the state which supports more than 70% of population has a growth rate of only 2% as against the overall state growth of 9% over last 5 years. "The situation is of poor inclusive and equitable growth. Banking programs and products should be formulated in such a way that it suits and benefits the un-banked category. Needless to say that system needs immediate revamping", it observed.

Incidentally, Orissa has 8159 post offices in the rural sector and 603 in the urban area as against only 2900 commercial banks across the state. If RBI accepts the union government proposal to allow post offices function as banks, the state will immensely stand benefitted.

"Post offices have infrastructure in remote places where banks just can never have a base. The rural poor will be the net gainer if post offices are allowed to carry on banking operation as it would eliminate private money lenders, MFIs and other exploitative institutions", EFCAI secretary general H K Mohanty on Friday told "The ET".