"The efforts by payments banks to establish branches will help supplement the work being done by public sector and private banks to open brick-and-mortar branches in the un-banked gram panchayats (GPs) of the state", said a senior government official.
The RBI has licensed 11 entities to open payments banks -- Aditya Birla Nuvo, Airtel M Commerce Services Ltd, Cholamandalam Distribution Services Ltd, Department of Posts Ltd, Fino PayTech Ltd, National Securities Depository Ltd, Reliance Industries Ltd, Dilip Shantilal Sanghvi, Vijay Shekhar Sharma, Tech Mahindra Ltd and Vodafone m-Pesa Ltd. These payments banks are mandated to target financially excluded customers like migrant workers, low-income households and tiny businesses.
At present, out of 6,238 GPs of the state, as many as 4,597 GPs were identified as un-banked in 2014. The gram panchayats in Odisha have an average geographical area of 25 sq km. This is a reasonable size for having a bank branch so that people don't have to travel long distances to access one.
If the villages are far away from the physical branch, the extension of banking service will not be satisfactory, even though such services may be provided through business correspondents (BCs). The State Level Bankers Committee (SLBC) has consequently decided to open a brick-and-mortar branch in each of the 4597 unbanked GPs.
According to SLBC data, banks have, until December 2015, opened 152 branches in un-banked GPs. In 2015-16, banks have established only 33 branches compared to the allocated target of 1,926 with most private sector banks drawing a blank. However, privately-owned HDFC Bank has opened 21 branches in the un-banked GPs, beating even the most networked State Bank of India (SBI), which only opened 17.
The state government is also providing space in GP offices free of cost for opening branches. There are 367 identified un-banked GPs where necessary infrastructure is already available. However, one of the major issues is availability of internet connectivity in remote locations.