With the strong support of the RBI and the Finance Ministry, banks in India are now aggressively moving forward to get the un-banked into their fold.
Banks have drawn up big plans to achieve this. For instance, Canara Bank, which has about 24 lakh no-frills accounts, targets 21 lakh more by March 2013, and aims to garner Rs 750 crore deposits and Rs 1,250 crore credit disbursements in the current year from the existing ones. To help them achieve this, the bank wants to employ 4,000 business correspondents (BCs), of which, 500 have already been recruited. For the rest, the bank has floated request for proposals (RFPs) for institutional BCs, Mr S. Raman, Chairman and Managing Director, told Business Line recently.
End-to-end solutions
These institutional BCs will provide end-to-end solutions, and for each transaction commission will be paid, he said. Each BC will be entrusted 3-4 villages, and would handle 1,000-1,500 accounts.
The bank has been allotted 1,523 villages with a population of 2,000 and above, and about 12,000 villages with lesser population. Similarly, Vijaya Bank too has floated RFPs for institutional BCs which would provide not only the technology for driving the programme but also the BCs that would be on the field. The bank has already appointed 47 BCs, and hopes to appoint institutional BCs by the end of this month. It plans to drive the programme to 294 villages through branches and 1,577 villages (both those with over 2,000 population and lesser) through the BCs.
No-frills accounts
The bank already has 3.25 lakh no-frills accounts, and Rs 33 crore balance in these accounts which also have a credit linkage of Rs 1.17 crore through overdraft. And the bank sees benefit in dovetailing the financial inclusion programme with the efforts that it will be putting in for the country's unique identification (UID) project for which it is a registrar.
Another bank which is dovetailing these two programmes is State Bank of Mysore. “If we do an ‘iris' capturing in addition to what we are doing for financial inclusion, we could give these customers an UID number. So we could dovetail the two,” said Mr Dilip Mavinkurve, Managing Director, State Bank of Mysore. This is possible if the Ministry of Finance and the RBI approve the Unique Identification Authority of India's (UIDAI's) proposal to make the ‘know your resident' (KYR) norms equal to ‘know your customer' (KYC) norms.
In what it claims is a unique initiative, Canara Bank plans to organise all the no-frill accounts into groups, and extend credit to the joint liability groups. “We are looking at organising one-third of the 45 lakh accounts into 4-5 lakh groups,” said a bank official.
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