Finance Minister Nirmala Sitharaman said this will enable people to access their account online and also transfer money within post office accounts and to other banks.

Nirmala Sitharaman
Money Union Budget 2022 Tuesday, February 01, 2022 - 14:44

More than 35 crore Post Office deposit accounts with deposits aggregating Rs 10 crore will now be connected to the banking system. Finance Minister Nirmala Sitharaman announced connecting 1.5 lakh Post Offices to the core banking system that will enable people to access their account online and also transfer money within post office accounts and to other banks, Finance Minister Nirmala Sitharaman announced on Tuesday, February 1.

"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 also provide online transfer of funds between post office accounts and bank accounts," Sitharaman said. She added that this will be helpful, especially for farmers and senior citizens in the rural areas, enabling interoperability and financial inclusion. Currently, post offices provide savings account services and payments bank services through the India Post Payments Bank.

Sanjay Doshi, Partner and Head, Financial Services Advisory, KPMG in India said this will mean financial inclusion of account holders across 1.5 lakh Post Offices. At present, the Post Office deposits limited transfer of funds within their ecosystem as the same was not connected to the banking ecosystem. 

Doshi said more than 35 crore Post Office deposit accounts with deposits aggregating to more than Rs 10 lakh crore will be connected to the core banking system. Being part of the core banking will result in ease of managing funds, including transferring funds from the Post Office savings to bank accounts and vice versa.

This means access for banks to Post Office accounts and deposit holders, ease of access to banking customers is an opportunity for the Post Office savings schemes to tap the deposits lying with banks. Interoperability will provide banking infrastructure access (for example Bank ATMs) to Post Office customers.

With PTI and IANS inputs

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