The Department of Post in said to be in talks with Deutsche Postbank (Deutsche Bank subsidiary) to enter into the housing finance business.
According to the arrangement, the loan disbursal will be available through selected post offices.
The New Delhi Post office already has a similar arrangement with the State bank of India (SBI) to help people open an account through the postal department.
Educational, housing and personal loans can also be applied for and sanctioned from SBI through the postal department.
The postal department with a huge network of 155,000 post offices is exploring tie-ups with other banks to disburse housing loans in the rural areas.
It also has a tie-up with UTI MF, Principal PNB AMC, Prudential ICICI and SBI Mutual Fund for selling their mutual funds.