Union Bank to bring hawkers under its fold

Union Bank of India will bring banking services to the doorsteps of over 2.5 lakh hawkers in Mumbai by partnering with their association and FINO Fintec, a micro finance institution. At the first instance, the bank will issue biometrics smart cards and open savings accounts for ease of transactions.

Having a regular bank account is a tough task for hawkers due to issues of know your customer (KYC) norms. Also, it is not possible for them to visit branches during regular work hours as it will mean loss of business.

Hence, business correspondents armed with point of transaction (PoT) machines will reach out to hawkers, who are migrants, for dispensing or accepting cash every day.

"Those leading hand-to-mouth existence have strong urge save, even if it means small amount, but are unable to do so in the absence of bank account. The no-frill account will be vehicle to save," chairman and managing director M V Nair said.

The public sector bank has already issued biometric cards along with accounts to 60 persons on August 15, 2007 coinciding with 60th indpendence day. It expects to issue cards to one lakh hawkers by the end of this financial year.

After arranging for saving account, bank will extend finance through general credit card. These persons engaged in activities like vending of fruits or working as cobblers borrow on daily basis often at exorbitant rates. In contrast to pay high loan rates, bank funds will be made available at normal lending rates.

Nair said as hawkers increase transactions, bank could provide a insurance cover to them group policy from Life Insurance Corporation of India. The provision of the cover will require the bank to provide financial education to them.

In the next stage of inclusion, the bank would provide loans for children's education.