HDFC Bank in talks with India Post for microfinance in Maharashtra

Private sector bank HDFC is looking to increase its reach in the microfinance segment by tying-up with the postal service department and is in talks with it for the same.

"Our bank is now evaluting opportunities to tie-up with the postal department to increase our microfinance base in the rural areas of Maharashtra," a senior HDFC Bank official told PTI here today.

The official also said that even if the postal department keeps for itself a three-per cent spread, credit could be extended at not more than 15 per cent interest rate, and the post-offices could lend to the borrower directly.

The government of India has also set up an inter-ministerial group to explore the chances of allowing India Post to set up a savings bank for the same.

"The network of more than 1.5 lakh offices across the country (more than twice the number of all the branches of the entire banking system) has turned out to be perhaps the most valuable resource of the Department of Posts to utilise this service," the official said.

India Post has already tied-up with National Bank for Agriculture and Rural Development (NABARD) for extending microcredit in Tamil Nadu.

Now, it also planning to expand its activities elsewhere. Moreover, an MoU has already been signed with NABARD and projects for farmers of the suicide-prone Vidarbha region of Maharashtra and Kutch in Gujarat are in the pipeline.