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| Financial inclusion to cover villages of over 2,000 people |
| BS Reporter / Chennai/ Bangalore Feb 09, 2010, 00:03 IST |
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The State Level Bankers’ Committee (SLBC) has initiated steps to begin a renewed drive to achieve financial inclusion in the state by opening “no frills” accounts for families that do not have a bank account. It has set a target to bring all villages in Karnataka with a population of more than 2,000 under the banking fold by March 31, 2010, a senior banker said.
“All households across all villages in the state which have been issued photo identity cards by the state government will be covered under the financial inclusion programme with the opening of “no frills” accounts by March 31, 2010,” Basant Seth, CMD, Syndicate Bank told the SLBC meeting, here on Monday.
Seth, who is also the chairman of SLBC, said all families who do not have a bank account on the basis of the data from the department of food and civil supplies would be brought under the new programme. In order to focus on the quality of financial inclusion, at least 50 per cent of all the “no frills” accounts existing as on March 31, 2009, would be made active by March 31, 2010.
As another step towards financial inclusion, he said, lead district managers have been instructed to constitute a sub-committee of the district consultative committee to draw up a roadmap by March 2010 to provide banking services through a banking outlet in every village having a population of over 2,000, by March 2011.
In order to step up financial inclusion programme, the banks should make use of technology-based banking models, including Business Correspondents, Business Facilitators.
He, however, advised all banks to not just focus on opening bank accounts, but focus on operationalising such accounts by allowing a small overdraft, issuing general credit card and providing remittance and insurance facility. All banks should at least provide a small overdraft of Rs 500 or some micro insurance/remittance to the “no frills” account holders.
Seth also suggested all banks in the state make all efforts to issue at least 200,000 smart cards by February-end 2010 so that the electronic benefit transfer system (EBT) can be launched across the state on the basis of the experience gained in implementing the pilot projects.
Presently, two pilot projects are underway to implement the EBT system on a ‘One district, One bank’ model in three districts by State Bank of Mysore in Chamarajanagar, Axis Bank in Dharwad and Vijaya Bank in Mandya. The lead banks are implementing other pilot projects in Bellary, Chitradurga and Gulbarga districts for payment of social security pensions and wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme.
Based on the experience, the government will take a decision to implement the better of the two models for extending EBT scheme to the entire state, Seth added.
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