Banks will extend insurance to 'all' villages in state

Commercial banks in Karnataka are planning to extend insurance and other banking services to targeted beneficiaries to all villages with a populat-ion of over 2,000. The banks have prepared financial inclusion plans (FIPs) to provide banking facilities to all villages by way of a regular brick and mortar branch or using information and communication technology through banking correspondent (BC) model.

“These services will be provided using appropriate technology back up. In this regard, all banks have submitted their board approved FIPs as directed by Reserve Bank of India (RBI). The banks will meet the target of March 2012 set by the government of India for providing banking facilities to all villages with 2,000 and above population,” Basant Seth, chairman and managing director, Syndicate Bank and convenor, State Level Bankers’ Committee, said.

He said there are about 4,858 villages with a popu-lation of over 2,000 in Karnataka and of this, 3,367 villages do not have banking facilities.

In keeping with the decision taken at the meeting, the Governor of RBI had with senior officials of the state government and banks on May 14, 2009, it is decided that all households across all villages in Karnataka, which have been issued photo identity cards by the state government, will be covered under the financial inclusion programme by opening “no frills” accounts.

Data obtained from department of food and civil supplies was mapped village wise as per service area of branches and printed templates along with control sheets have been supplied to bank branches through lead district managers for verification of the existing accounts. The process of opening of “no frills” accounts under renewed drive would be completed by May 31, 2010, Seth said.

In regard to credit flow to Micro and Small Enterprises sector, Seth said that banks have been advised not to insist for collateral security for loans up to Rs 10 lakh, against the present limit of Rs 5 lakh. Continuing further, he said commercial banks have been advised by RBI to achieve a 20 per cent year-on-year growth, in credit to micro and small enterprises to ensure enhanced credit flow.

On this occasion state chief secretary S V Ranganath inaugurated the website of SLBC.