Russia will create a mammoth post bank that will have twice as many offices as its largest rival – Sberbank – with the country's Post service and the state owned SviazBank being merged.

For many Russian citizens the country’s post office with its 42 thousands offices is the face of the state. And that face will probably change. The post will receive one billion dollars of state money to help it add banking to its core activities. Aleksandr Kiselev, Head of Russia Post says it’s a step into the future.

“We will merge SviazBank and Russian post to form a National Post Bank. You will be able to open an account, make a banking transaction. It will cater for the needs of small and middle size businesses. It will take time but we have seen this work in many countries benefiting people, businesses and the state. Let's face it – focusing on logistics, financial services and express delivery is the future of all postal organizations in the world – as old forms of communications die out.”

An estimated 75 thousand staff will work on the frontline of Post Bank. They will have to be retrained or additionally hired.

Analysts admit that market penetration of financial services in Russia is still very low but doubt the Post bank will be able to compete with Russia's largest bank – Sberbank. Rustam Botishev, Senior Analyst at Unicredit Securities says that with one major state owned bank dominating the sector, he doesn’t see why there is need for another large state backed competitor.

“I don't see a clear picture why do we need another mammoth bank in the banking sphere. Sberbank has 50% market share of deposits, 20 thousand branches countrywide, which is more than enough in my opinion. I don’t clearly see why we need Russia post as a competitor to Sberbank.”

You can already SviazBank coexisting peacefully in Russian post offces – as if waiting for marriage day. But its unclear why people would want another plastic card from Post Bank – particularly elderly pensioners like Irina who are the post's most frequent customers.

“I go to Sberbank to get my pension and I want it to stay this way. It's difficult for the elderly to get their head around these new things like plastic cards. Our eyesight is not what it used to be you know.”

But the idea behind setting up Post Bank may lie in national security. Like most countries, Russia is dependent on foreign payment systems like Visa and MasterCard. A law in the making will oblige every Russian citizen to have bank card that will incorporate – and replace – the medical insurance and pension cards. A national payment system, or a security service database – the project is likely to attract attention.