PERMANENT TSB is in talks that could lead to post offices around the country carrying out branch functions for it as well as two other banks.
The talks have been confirmed just months after state-owned Permanent TSB closed 19 branches, and if successful may lead to the closure of more retail units.
The country's network of 1,150 post offices already carries out banking services for AIB and National Irish Bank, which was taken over by Danske Bank and has taken on its name.
AIB closed 44 branches last month, from a total of 67 that are to go by next year. Earlier this month, Danske closed its 27 branches.
And 26 post offices offer home, motor, life and travel insurance for Aviva after the insurer closed 27 branches here this year.
Ulster Bank is expected to announce the closure of 40 branches next year. Overall, one-quarter of the existing branches of the different banks are set to close.
An Ulster Bank spokeswoman said she was not aware of talks between it and An Post.
A spokesman for Permanent TSB confirmed that it was in talks with An Post. The bank is closing 19 of its 92 branches.
The move means post offices are set to become the branch network for banking across the State.
Every post office is fully automated, allowing them to accept cheques, cash and credit card payments for AIB and Danske customers.
Two-fifths of banking customers use online banking, but large numbers still want to physically lodge cash and cheques.
Some 1.7 million people use a post office every week, with 80pc of these going in on a weekly basis, sources indicated.
The Irish Postmasters' Union is pushing hard for post offices to be allowed to offer a more extensive range of services.
Already people can use a post office to:
• pay a garda fine.
• pay an Electric Ireland/ ESB bill.
• Get a gun or dog licence.
• Pay a credit card bill.
• Lodge money in a bank account.
An Post offers some of the best value savings, with tax-free savings certs and savings bonds.
The service has captured 30pc of the retail market for foreign exchange, allowing people to buy sterling and dollars with no commission.
Some post offices are open five-and-a-half days of the week.
All of this means that post offices have become a serious challenge to banks, which find it expensive to offer many of these services in branches in smaller towns.
The Irish Postmasters' Union is lobbying to have post offices also offer the option of paying motor tax, the household charge and hospital charges.
A spokeswoman for An Post said it had handled three million transactions for AIB last year.
"Ours is a unique network in terms of size, systems capability and personal service. Investment and innovation ensure that we have plenty of capacity for more business."