Ten years ago, Indian software professional Gitali Pawar dreaded her occasional trips to the drab local post office.
"It was hot and dusty, and the serpentine queues made an ordeal of a simple task like buying stamps," the 28-year old said.
Today, it's a very different story.
The post office in central Bombay, India's financial capital, is brightly lit and air-conditioned. Posters plaster its walls, offering a range of services undreamt of a decade ago.
Pawar can now choose among services such as speed post, telefax and Internet kiosks at the post office, where cranky clerks formerly sold mainly just stamps and letters. She can also buy mutual fund units, bonds and receive money from overseas.
And very soon, she will be able to borrow money against a postal savings instrument, access an automated teller machine and change money.
Once seen as an example of public sector sloth, India Post is converting itself with a vengeance into a one-stop shop for financial services.
"Distribution of new financial services outside of eight to 10 major cities is still very low," said A.P. Singh, a director in India's department of posts.
"India Post can change this scenario and help mobilize business from hitherto untapped markets."
So, threatened also by mushrooming local courier businesses that offer an efficient alternative to its lengthy delays, India Post is grabbing opportunities created by 10 years of economic reform that have transformed India's banking sector.
Its makeover could transform the way financial services are delivered in the world's second-most populous nation, a country of more than one billion, by potentially deepening the market.
"It could well provide a useful developmental example of what could be done in other countries to help broaden financial markets," Simon Bell, a senior economist with the World Bank in Washington, said in an e-mail statement.
"The World Bank's interest in the project is the capacity to use a physical infrastructure such as the post office to deliver goods and services down to a very decentralized village level," he said.
India Post's far-flung network of 154,000 branches reaches virtually every corner of a sprawling nation which individual players would find it expensive to access.
By comparison, the country's 2,200 banks have 67,000 branches.
Besides its unparalleled reach, India Post has vast experience in mobilizing public resources. Its Post Office Savings Bank (POSB) had deposits of 1.82 trillion rupees (US$$38.5 billion), or around a fifth of national savings, at the end of the the last financial year.
And its brand name could carry it a long way as Indian investors become increasingly suspicious after a series of scandals hit the country's largest mutual fund -- a state-run outfit -- and banks.
"The Post Office Savings Bank is set to emerge as a financial services supermarket and the largest retail distributor of financial products and services," said Gautam Bhardwaj, chief of Invest India Economic Foundation (IIEF), a leading independent agency involved in financial training and education.
India Post started with a pilot project in January, and more than 200 branches in cities and towns now sell mutual fund units, bonds and offer international money transfers.
Residents of small towns such as Udipi in the southern state of Karnataka, or distant Port Blair in the Andaman and Nicobar islands in the Indian Ocean, can now buy into mutual fund schemes from neighborhood post offices.
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