Financial inclusion: banks to work on a wider canvas
27 Oct 2009
Based on the recommendations of a group based on the experience gained to date with the business correspondent (BC) model, the RBI has proposed to allow banks to appoint the following new entities as BCs in addition to those permitted already.
These include individual kirana/medical/fair price shop owners, individual public call office (PCO) operators, agents of small savings schemes of Government of India/insurance companies, individuals who own petrol pumps, retired teachers and authorised functionaries of well-run self-help groups (SHGs) linked to banks.
The RBI has also decided to allow banks to collect reasonable service charges from the customer in a transparent manner under their board-approved policy for delivering the services through BC. RBI has asked banks to clearly explain this to the customer.
Based on the experience gained, the working of the scheme will be reviewed after one year.
Of the total of 623 districts in the country, 431 districts have so far been identified for 100 per cent financial inclusion. Of these, 204 districts in 18 states and six union territories have reported having achieved the target. All districts of Haryana, Himachal Pradesh, Karnataka, Kerala, Uttarakhand, Goa, Chandigarh, Puducherry, Daman and Diu, Dadra and Nagar Haveli and Lakshdweep have reported having achieved 100 per cent financial inclusion.
The RBI had undertaken an evaluation study through external agencies in 26 districts of eight states claiming 100 per cent financial inclusion, to draw lessons for further action. The study reports had, inter alia, revealed that although the SLBCs had declared several districts as 100 per cent financially included, the actual financial inclusion was short of that. A large number of no-frills accounts are dormant, the number of transactions is small and ICT-based financial services are yet to reach many villages. The findings of the study were communicated to banks in January 2009 with an advice to take appropriate action.
