Indian Bank to open 5 lakh no-frills accounts

Chennai-based Indian Bank is gearing up to further its financial inclusion initiatives and increase penetration into rural areas.

The public sector bank, the first one to implement a financial inclusion project (which involves instilling the banking habit among the lesser privileged of urban and rural India), expects to open five lakh "no-frills accounts" to encourage rural savings and business ventures by the end of this financial year. It has already opened over 4.5 lakh such accounts.

"There is plenty of hidden potential in rural areas and financial inclusion initiatives have helped the bank double its business growth from rural and semi-urban areas," said Chairman and Managing Director M S Sundara Rajan.

For the year ended March 31, 2007, the bank posted 22.94 per cent growth in rural deposits over the previous year. It mopped up Rs 4,347 crore in deposits during 2006-07 from rural areas as against Rs 3,536 crore in 2005-06, a rise of 12.01 per cent over the 2004-05 figures.

In semi-urban areas, the bank posted 17.50 per cent growth in deposits at Rs 8,280 crore compared with Rs 7,047 crore in 2005-06.

The bank expects to sustain the high growth in deposit mobilisation from rural and semi-urban areas for the current financial year also.

As on September 30, 2007, the bank had 470 branches in rural areas and 373 branches in the semi-urban areas out of 1,488 branches in India.