Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Financial Inclusion High on The Agenda Government

Several Measures to Extend Banking Facilities to Excluded Population

Financial Inclusion is an important priority of the Government as only 37% of bank branches of Scheduled Commercial Banks are in rural areas and only about 40% of the country’s population has bank accounts.  Government of India and the Reserve Bank of India (RBI) have announced various measures to increase the reach of banking services to the excluded population of the country. The RBI has recently permitted all Scheduled Commercial Banks excluding  Regional Rural Banks to open branches in Tier-III to Tier-VI Centres (with a population up to 49,999 as per 2001 census), without having to take permission from the Reserve Bank of India.


Further, the Finance Minister in his budget speech 2010-11 stated that in order to reach the benefits of banking services to the ‘Aam Aadmi’ the Government in consultation with the Reserve Bank of India (RBI), has decided to provide appropriate banking facilities to habitations having population in excess of 2000 (as per 2001 census) by March 2012. These services will be provided  using the Business Correspondent (BC) and other model with appropriate technology back up.


RBI has also advised banks to provide the facility of ‘no-frill’ accounts with ‘nil’ or very low minimum balances as well as charges that would make such accounts accessible to vast sections of population.  Both public and private sector banks have been opening such accounts.  RBI has reported that banking secretor as a whole has opened 3.92 crore such accounts as on March 31, 2010.


Several other initiatives have also been taken by the Government of India and the RBI for furthering the reach of banking services and financial inclusion.  These include easier credit facilities for the smaller customers, simpler Know Your Customer (KYC) norms, permission to use smart cards, mobile hand held electronic devices for banking transactions, liberalization of Bank Branch and ATM authorization policies and encouraging Financial Literacy/Credit Counseling.  For mobile banking transaction banks are now permitted by RBI to offer this service to their customers subject to a daily cap of Rs.50,000/- per customer for both funds transfer and transactions involving purchases of goods/services.  The maximum value of such transfers shall be Rs.5000/- per transaction.


This information was given by the Minister of State for Finance, Shri  Namo Narain Meena   in a written reply to an Unstarred Question raised in Rajya Sabha today.


Popular News

Follow Follow Book Book Book Business Course caclubindia books

Browse by Category