An Exploratory Study on the Role of Post Offices and Public Sector Banks in Advancing Financial Inclusion

Abstract

Financial inclusion has emerged as a crucial instrument for promoting equitable access to formal financial services and enhancing socio-economic development. The present study explores the role of Public Sector Banks and Postal Services in advancing financial inclusion by examining the influence of financial services, digital banking adoption, customer awareness and service quality, and customer satisfaction. A quantitative exploratory research design was adopted, and data were collected from 392 customers (equally participation from Banking Sector and Postal Services), comprising equal representation from Public Sector Banks and Postal Services. The study employed Partial Least Squares Structural Equation Modelling (PLS-SEM) to evaluate the proposed conceptual framework. The results revealed that financial services significantly influence digital banking adoption and financial inclusion, while customer awareness and service quality significantly affect customer satisfaction and financial inclusion. Furthermore, digital banking adoption and customer satisfaction were found to partially mediate the respective relationships with financial inclusion. The model demonstrated satisfactory reliability, validity, explanatory power, and predictive relevance. The findings highlight that financial inclusion is achieved through a combination of institutional service provision, digital transformation, customer awareness, and positive service experiences. The study contributes to financial inclusion literature by providing an integrated framework that explains both direct and indirect pathways influencing financial inclusion and offers practical insights for strengthening inclusive financial ecosystems.