Financial Inclusion

In his Budget Speech 2010-11, the Finance Minister had directed all banks to provide appropriate banking facilities to habitations having population in excess of 2000 by March, 2012 using various models and technologies including branchless banking through Business Correspondents (BCs). The Financial Inclusion Campaign has been named ‘Swabhimaan’. The Banks formulated their road maps for Financial Inclusion through the mechanism of the State Level Bankers Committee (SLBCs) and had identified approximately 74,000 habitations across the country having a population of over 2000 for providing banking facilities. These habitations were allocated to Public Sector Banks, Regional Rural Banks, Private Sector Banks and Cooperative Banks for extending banking services by March, 2012. As per information received from SLBC Convener Banks, out of 74,398 villages identified under the campaign, 74,194 villages have been covered and 3.16 crore Financial Inclusion bank accounts have been opened by end of March, 2012.

Further, the banks have been advised to set up Ultra Small Branches in villages covered under Business Correspondent model where the officer designated by the bank would be available with a lap top on predetermined day and time in a week. While the cash services would be offered by the Business Correspondent Agent, the bank officer would offer other services to be offered by the bank, undertake field verification and follow up the banking transactions.

The Government issued Strategy and Guidelines on Financial Inclusion in October, 2011, vide which it was, inter-alia, advised to banks to open bank branches by September 2012 in all habitations of 5,000 or more population in under banked districts and 10,000 or more population in other districts. As per reports received from the Convener Banks of State Level Bankers Committees (SLBCs), of the 3,905 bank branches to be opened, 739 bank branches have been opened by end of April, 2012.

Regional Rural Banks (RRBs) have also been advised to work out branch expansion plan such that there is an increase of 10% in bank branches in 2011-12 and also in 2012-13 over the respective previous years. As per provisional data, RRBs opened 914 branches during 2011-12.

Of the 71 unbanked blocks in the country, as on 31 March, 2011, with the persistent efforts of the Government, banking facilities have been provided in all unbanked blocks by March 31, 2012. As a next step it has been advised to cover all those blocks with Business Correspondents and Ultra Small Branch which have so far been covered by mobile banking only.