Competition between postal and bank branches for household savings: Empirical evidence from India

Abstract

Postal financial services have been the beacon on financial inclusion globally. However, with the impact of digitalization, the physical network of post offices no longer remains the core competency. This article analyzes the various factors contributing to household savings across both banks and post offices. It examines the effect of competition at the network level between banks and post offices. The main finding is that the extensive physical network of post offices does not significantly impact postal deposits. There is competition between post offices and private and public banks at the rural population class level. However, at the urban population class level, competition exists only at two levels: between private banks and India Post and between nationalized banks and India Post.