In order to make the operation of no-frills accounts opened under the financial inclusion plan feasible, State Bank of India (SBI) is mulling to charge account-holders for every transaction they conduct.
The bank is confident that a nominal charge which can be either a percentage of the amount transacted or a fixed amount will not dissuade people from operating no-frills accounts, a senior SBI official involved in its financial inclusion initiatives told PTI here on strict condition of anonymity.
Paying a small amount like Rs 3 for a transaction will be preferred than travelling 20-kilometres to reach a branch, he said, clarifying that the bank, however, has not finalised any plan yet.
The bank is confident that a nominal charge which can be either a percentage of the amount transacted or a fixed amount will not dissuade people from operating no-frills accounts, a senior SBI official involved in its financial inclusion initiatives told PTI here on strict condition of anonymity.
Paying a small amount like Rs 3 for a transaction will be preferred than travelling 20-kilometres to reach a branch, he said, clarifying that the bank, however, has not finalised any plan yet.
The bank has to take care of recurring expenses like maintaining the back-end systems and paying the business correspondent (BC) who is operating on behalf of the branch at the village level, he said.
Campaign activity through multiple media will be going into the programme which will heighten public interest in being a part of the banking system and assuage any concerns.
However, when asked if such a move will face any regulatory hurdles, the official said, "though the regulators have given us all the freedom, it is very difficult to say (what their reaction will be)."
Financial inclusion plan covers opening of last mile banking infrastructure at village level to get the local population into the formal banking system.
In his budget speech this year, Finance Minister Pranab Mukherjee had outlined that all the 60,000 unbanked villages having a population of over 2,000 will be covered by March 2012, which were subsequently allotted within the public sector banks.
Considering the investment required in traditional brick-and-mortar branches, banks are outsourcing the operations to non-bank financial companies, appointing them as BCs to look after the operations.
+1.jpg)
1 comment
Awesome information, many thanks to the article writer. It’s understandable to me now, the effectiveness and importance is mind-boggling. Thank you once again and good luck!
Post a Comment