RBI working on 3-year financial inclusion plan

Written by fe Bureau | Pune | Updated: May 10 2010, 05:34am hrs
In its platinum jubilee year, the Reserve Bank of India (RBI) wants to connect every Indian to the countrys banking system. RBI is currently working on a three year financial inclusion plan and is discussing this with each bank to see how to take this forward, KC Chakrabarty, deputy governor, RBI said.

Nearly forty years after nationalisation of banks, 60% of the countrys population does not have bank accounts and nearly 90% do not get loans, he pointed out . What forty years of nationalisation of banks could not achieve could be done by technology which can help connect banks to the common man, he said.

RBI will encourage new models of banking that are more connected to people, he said. Chakrabarty was referring to the success story of the Mann Deshi Mahila Sahakari Bank, an urban cooperative bank operating in Satara district that provides micro finance facility to women. He was at Mhaswad in Satara on Sunday to launch an e-Card that would enable the bank automate its existing processes and to reach out to more customers.

If banks are connected to people, banks will get more business. In the future, we want banks to go everywhere and what is required is a good management capability and delivery mechanism like the kind that HSBC has provided MannDeshi, he said.

RBI wants banks to do more business and in a viable manner. Conventional brick and mortar branches will soon be a thing of the past. Instead technology will play a major role in helping banks to intensify coverage, he said. RBI will encourage such new models of banking and will play the role of a facilitator.

Financial services will evolve as a new business model and therefore financial inclusion should become integral to banks, he said. While cooperative banks could play a major role in financial inclusion, it must be realised that consolidation in this sector is not really a bad thing. Those who do not scale up shall not survive, he said.

The MannDeshi Mahila Bank with support from The Hong Kong & Shanghai Banking Corporation (HSBC) launched an e-card for its account holders. The e-card read through a handheld device will help individual customers access basic information such as account balance, loan account status as well as repayment history at their doorstep. The e-card initiative is supported by Atyati Technologies, Intel and Sidbi. The bank intends to service its customers in remote areas with its agents carrying GRPS-enabled hand-held devices with a card reader, a biometric sensor camera and printer. MannDeshi currently has six branches has deposits worth Rs 29 crore, advances of Rs 19 crore and Rs 3 crore of its own funds.

The bank totally has around 170,000 account holders. In the first phase the card would be offered to 7,000 account holders, Chetna Sinha, founder & chairman, MannDeshi Mahila Sahakari Bank said. The bank plans to approach RBI seeking permission to permit delivery of money at the customers doorstep soon.