The state finance department has urged all district collectors to take stock of progress made with respect to establishment of ultra small branches (USBs) by commercial banks in Odisha under ‘Financial Inclusion Plan’.
The department of financial services under Union finance ministry had asked the banks to set up USBs in all villages with a population of over 2,000 where brick and mortar branches are currently not viable.
“The department of financial services has specifically advised that the district collectors should monitor the establishment of USBs at the meeting of district level consultative committee. Accordingly, you are requested to take stock of the progress made by the banks operating in your district with regard to establishment of the USBs and send periodic progress report in this regard,” state finance secretary J K Mohapatra stated in a letter to all district collectors.
Mohapatra pointed out that lack of access to finance for the small and marginal farmers poses serious threat to economic progress. The prolonged and persistent deprivation of banking services to a large segment of the population is fraught with the risk of fueling social tension and causing social exclusion, he held.
The operation of USBs will be supervised and monitored by banking correspondents and banking correspondent agents, appointed by the respective bank branch, on specified days every week. This will ensure that a range of banking services are available to the households in the identified villages.
While the cash services would be offered by the banking correspondent agents, the bank officers would offer other banking services, undertake field verification and follow up on banking transactions.
The finance department has also stressed on mobilizing regional rural banks (RRBs) to deepen financial inclusion.
“As a shareholder of the RRBs, the state government has a significant role in strengthening of these banks keeping in view their potential for credit expansion, particularly to the agriculture sector, deposit mobilization and implementation of various credit linked development and welfare schemes in the rural areas. Mobilization of low cost deposits could contribute in improving the business of the RRBs and parking of government funds with the RRBs would be a major source of low cost fund for these institutions,” Mohapatra said.
The finance department has asked the district collectors to park surplus or un-utilized funds of the district level autonomous societies in the RRBs operating in their districts to strengthen their financial position and to encourage them to participate more effectively and pro-actively in government’s financial inclusion.