New fin inclusion plan to be launched in 2011

Come New Year, the government will launch a new nationwide campaign for financial inclusion, Swabhiman, aimed at bringing unbanked areas in to banking fold. The idea is to transform the programme into a broad-based political movement.

The campaign will be unveiled by Congress president Sonia Gandhi, in New Delhi.

Through the financial inclusion programme, the government seeks to enlarge banking services spread into the selected 73,000 villages having population up to 2000, by March, 2012.

The idea behind the campaign is not only to create awareness among the nearly 4 crore beneficiaries of the programme, but also to spread financial literacy.

The finance ministry is now burning midnight oil to prepare the ground work to launch the nationwide campaign at the hands of Congress high command Speaking to FE, KV Eapen, joint secretary, ministry of finance confirmed about the financial inclusion campaign and said the banks had also been asked to launch similar kinds of campaigns at their own level with the help of Indian Banks? Association (IBA).

?Through the Swabhiman programme, we are not only concerned about opening of nearly 4 crore no-frills accounts in the country. We also want that there must be transactions through those accounts to make it a huge success,?? said Eapen.

Also, the Centre wants banks to take the help of business correspondents (BCs) to reach masses in rural areas, he added.

Through Swabhiman, the banks can look at launching their services like small overdraft facility, remittance, small loans and small deposits to increase their current account and savings bank account, said Eapen.

?Finally, we expect the banks to adopt the route to popularise the electronics benefit transfer (EBT) scheme too, through which the government makes payments to the workers involved in various government-run schemes by way of smart cards,?? he said.

Last week, in this context Eapen along with his another colleague Rakesh Singh, joint secretary, ministry of finance had interacted with senior bankers in Mumbai.

The banking industry, which was represented by 18 state-owned banks?including Central Bank of India CMD S Sridhar, Indian Overseas Bank CMD M Narendra, Bank of Maharashtra CMD AS Bhattarcharya, and Indian Bank CMD TM Bhasin?had a day-long brain storming session on the strategies that need to be adopted for implementing the government agenda.

Eapen said the government was satisfied with the way the financial inclusion programme was being implemented by all the state-owned banks.

The finance ministry will be holding similar kind of meeting in Mumbai again towards the February-end to have a final review of the programme, he said. Earlier, Prime Minister?s Economic Advisory Council chairman C Rangarajan had said financial inclusion was no longer an option, it had become a compulsion.

?Banks need to think on how to meet the challenge of meeting the credit demands of the the marginalised,?? he had suggested.

Bhaskar Sen, CMD, United Bank of India said banks? role has already been defined and hence they will have to be more aggressive to achieve the financial inclusion target.

K Ramakrishnan, chief executive, Indian Banks? Association the progress on financial inclusion front, when compared to the level which was achieved by the banks three months ago, was remarkable and hence achieving the target is not difficult for the banks.