Spread of mobile banking priority for Modi government: Jaitley
31 July 2014
Finance minister Arun Jaitely today indicated that financial inclusion is a priority target for Prime Minister Narendra Modi's government, and plans are afoot for a campaign to ensure that 7.5 crore households that currently do not have access to banking would have at least two accounts.
Among other things, mobile banking would be made available even on less advanced mobile phones rather than only smartphones, Jaitley said after a meeting with the heads of government-run public sector banks in New Delhi.
''The intention is, in a mission mode, to have a formal campaign which will be announced by the Prime Minister and then throughout the country to have a campaign for inclusion.
''This campaign for inclusion will be at various layers,'' he said.
Jaitley said that in some areas where branches are possible, brick and mortar branches will be created. ''Where it is not possible, there smaller branches manned by one or two people would be created''.
The layer below that will be kiosks, he said, adding that yet another layer below, will be ATMs and then the human contact through Business Correspondents.
''The objective is to reach every household possible and have at least two account holders in every house. Currently, financial inclusion and the reach of the banking systems extends to about 58-59 per cent and therefore the dark areas which are not covered these include about 7.5 crore households,'' he said.
Jaitley, during the meeting, also discussed the possibility of exploring and expanding mobile telephony banking. Currently, it can be made available on smartphones, and effort is to extend it to all phones.
''In the course of next two years, we hope to make a considerable headway. The unit for contact is not a village, it is a person and therefore it is a higher level of ambition which we are trying to reach,'' the Minister said.
According to Census 2011, only 59 per cent of the 246.7 million households across India have access to banking services – 54 per cent of the 167.8 million rural households and 67 per cent of the 78.9 million urban households.
Prime Minister Narendra Modi is expected to announce the Sampoorn Vittiyea Samaveshan (comprehensive financial inclusion plan) on 15 August along with a roll-out plan.
The financial inclusion plan will look to provide universal access to banking facilities with a basic bank account with an overdraft facility of Rs5,000 and a RuPay-enabled debit and ATM card with inbuilt accident insurance cover of Rs1 lakh. RuPay is a debit card payment network launched by the government in 2012.