Banks rise on PM's financial inclusion plan

Shares of fourteen banks rose by 0.06% to 2.28% at 10:49 IST on BSE after Prime Minister Narendra Modi announced a new financial scheme to help the poor open bank accounts.

Yes Bank (up 2.28%), Kotak Mahindra Bank (up 2.11%), ICICI Bank (up 1.28%), Union Bank of India (up 0.91%), Punjab National Bank (up 0.90%), Axis Bank (up 0.87%), HDFC Bank (up 0.87%), Canara Bank (up 0.84%), IndusInd Bank (up 0.84%), Bank of India (up 0.71%), Federal Bank (up 0.52%), State Bank of India (up 0.52%), Bank of Baroda (up 0.18%) and IDBI Bank (up 0.06%), edged higher.

The BSE Bankex was up 1.16% to 17,450.90. It outperformed the Sensex, which was up 0.42% at 26,212.78.

The BSE Bankex had underperformed the market over the past one month till 14 August 2014, rising 3.95% compared with 4.38% rise in the Sensex. The index had also underperformed the market in past one quarter, rising 6.12% as against Sensex's 9.61% rise.

Prime Minister Narendra Modi on Friday, 15 August 2014, launched 'Pradhan Mantri Jan Dhan Yojana' to help the poor open bank accounts, which will come with the facility of a debit card and an insurance cover of Rs 1 lakh.

Observing that people have mobile phones but not bank accounts, Modi said, the scheme will help in bringing the benefits of formal banking system to them.

Under the Jan Dhan Yojana, Modi said that the person who will open bank account will get a debit card and the family will get Rs 1 lakh insurance cover. This will help the family to tide over the unforeseen eventuality.

According to media reports, the Union Cabinet has already cleared the two-phase financial inclusion scheme under which bank accounts will be opened for 15 crore poor persons with an overdraft facility of Rs 5000 and accident insurance of Rs 1 lakh.

The scheme, to be pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore identified households by August 2018, reports added.

The main features of the scheme include Rs 5,000 overdraft facility for Aadharlinked accounts, Ru Pay Debit Card with inbuilt Rs 1 lakh accident insurance cover and minimum monthly renumeration of Rs 5,000 to business correspondents who will provide the last link between the account holders and the bank.

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