One bank branch per 1,000 households to enable cash transfers from next month

Currently of about 6 lakh villages in the country, only 75,000 have a bank

As the deadline for direct cash transfer for subsidies in 43 districts nears, the government has started mapping of gram panchayats to provide banking services in remote parts of the country. It has asked banks to have at least one bank branch or business correspondent agents (BCA) for every village or group of villages with 1,000 to 1,500 households.

Of about six lakh villages in the country, only about 74,000 have a bank branch or BCA at present. As the government would extend direct cash transfers to other parts of the country in a phased manner, it would be necessary to provide banking services in these un-banked areas. 

 

“It shall be the endeavor to ensure that there is at least one bank branch/ Business Correspondent Agent (BCA) in every Gram Panchayat(s). Since the population of Gram Panchayat varies across the States, Banks need to ensure that about 1,000 to 1,500 households are available in the sub-service area of BCA,” the finance ministry said in a circular to public sector banks and regional rural banks.

Wherever there is either no BCA functioning or the performance of the existing BCA is less than satisfactory, the Common Service Centre (CSC), set up under the Department of Electronics and Information Technology, would be engaged as BCA.

“Till such time the banks install the software and complete other technical requirements for cash transactions, the CSC should be used for activities other than cash withdrawal transactions. They should, in particular, be used for opening new accounts of beneficiaries under the scheme for direct cash transfer,” the ministry said.

CSCs have been asked to be ready in terms of equipments, connectivity, biometric device, card reader and printer latest by the end of this month. New CSCs will be set up in areas where neither a BCA nor a functional CSC is available.

After covering the 43 districts by month-end, mapping of gram panchayats and BCA/CSC in their service area, and assignment of sub-service area, in the remaining districts would be completed by January 15, 2013.

As per Budget Speech 2010-11, all banks were advised to provide appropriate banking facilities to habitations having population in excess of 2,000 by March, 2012 using various models and technologies including branchless banking through BCAs. This financial inclusion campaign was  named ‘Swabhimaan’ under which banking facilities mainly through business correspondents were provided in  74,194 villages and about 3.16 crore financial accounts were opened. This yeat the government extended the campaign to habitations with population of more than 1000 in North Eastern and hilly States and to other habitations which have crossed population of 2,000 as per census 2011.
ENDS