CM for extension of banking services to thinly populated areas

Only 1,668 bank branches available for existing 15,761 revenue generating villages

The Uttarakhand Government on Friday urged the centre to take steps for extending banking services to all thinly populated areas of the hill state by relaxing tough central guidelines.

Chief Minister Vijay Bahuguna raised the issue during a meeting of union finance minister P Chidambram with chief ministers of northern states and heads of PSU banks at New Delhi.

As per the union budgetary provisions, villages having population of more than 1,000 are to be rendered with banking services. However, in Uttarakhand about 80% revenue comes from villages that have less than 500 population and 50% of the villages have less than 200 population, the chief minister noted.

Bahuguna stressed that the existing standard of population would have debarred large section of rural areas of Uttarakhand from the banking facility. He pointed out that most of the villages in the hill state were located at difficult geographical locations and the populations of these villages were very less. He revealed that there were only 1,668 bank branches for existing 15,761 revenue generating villages in the state.

The Chief Minister said that the existing standard was also posing difficulty in establishing broad band network facility. He said that recently Uttarakhand had signed MoU with Union Telecommunication & Information Technology Ministry for broad band connectivity in order to enhance banking services. However, under this agreement too only those villages with population more than 500 could be connected with the Broad Band. He said that most of the remote villages had comparatively less population but area being strategically sensitive it was necessary to have internet connectivity there. He urged the finance minister to render support in this direction.

Bahuguna also called for adopting cluster-approach in providing banking services in remote hill areas. He said that mapping undertaken through District Magistrates had identified 1583 clusters in the state. These clusters could be rendered banking services through branches, mini branches and banking correspondents. He observed that the hill state could make use of 8000 fair price shops as banking correspondents. He said that as all the treasures and sub-treasures were online they could be facilitated with E-scroll by agency banks for better performance.

Stating that only 5 banks were participants of E-payment initiated by the state commercial tax department, Bahuguna urged all the banks to connect themselves with E-payment system. He also urged the RBI to provide RBI Gateway to Uttarakhand akin to Karnataka. He said that this would facilitate early credit of amount in state’s account.