Nabard to support banks to open branches in LWE-affected districts

Nabard says the expansion of banking network in Left Wing Extremist-affected districts is critical for the empowerment of people in those areas

National Bank for Agriculture & Rural Development (Nabard) has pledged support to banks for opening branches in the un-banked villages in the Left Wing Extremist (LWE) affected districts in the country. Nabard would offer support for solar-powered VSAT connectivity.

Nabard, in a letter to chairmen and chief executive officers (CEO) of the scheduled commercial banks, regional rural banks, state cooperative banks, said that the expansion of banking network in LWE affected districts is critical for the empowerment of people in those areas.

"No/ erratic connectivity is a major deterrent for the banks to open new branches in the LWE districts. With a view to expand banking in LWE districts, it has been decided to provide VSAT connectivity support for new branches opening in the 150 districts from Financial Inclusion Fund", Nabard said in its letter.

The scope of the scheme is one time capital expenditure support of Rs 4 lakh and connectivity support of 50 per cent of expenditure incurred subject to the limit of Rs 45,000 per annum for a period of five years per branch in LWE affected 'un-banked villages'.

Only seven branches from each identified district will be supported under the scheme and first come first serve policy will be adopted in the processing of applications.

The banks keen to set up branches in the affected un-banked villages can avail support from either of the two models finalized by Nabard and the scheme will remain in force for banks till March 2017.

The states where 150 LWE districts are identified by Nabard for implementation of the scheme include Madhya Pradesh, Odisha, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu and Telangana.

Sources said, the Odisha government has already taken a lead in supporting the banks for opening of new branches in the unbanked GPs (gram panchayats) in backward and LWE affected districts -Malkangiri, Nuapada, Nabarangpur and Kandhamal by agreeing to bear the cost of VSAT connectivity to the banks for opening of first 15 banks in each of the four districts.