Corporation Bank is first to meet target ahead of schedule
The commercial banks in Karnataka are lagging behind the schedule of achieving the financial inclusion targets set up by the Reserve Bank of India (RBI). As against the target of reaching out 2,253 villages with a population of over 2,000 by March 2011, the banks have covered only 1,075 villages by end of December 2010, thereby achieved about 47 50 per cent of the target.
According to data available with the State Level Bankers’ Committee (SLBC), Karnataka the banks in the state have been set a target of covering 3,395 villages with population of over 2,000 having no bank branches in the state. These villages have no access to banking facilities.
Financial inclusion is the availability of banking services at an affordable cost to disadvantaged and low-income groups. In India the basic concept of financial inclusion is having a No-Frill savings account with any bank.
As advised by the RBI, the banks had indicated in their board approved financial inclusion plans (FIPs) that they would provide banking facilities to 2,253 villages by March 2011 and 3,395 villages by March 2012.
However, the Mangalore-headquartered public sector lender, Corporation Bank has completed its target of extending banking facilities to 124 villages well ahead of the schedule, said Basant Seth, chairman of SLBC.
“Certain discrepancies like duplication or overlapping of villages, inclusion of villages already having branches, and such others were observed and subsequently the target was revised. Thee banks have now been asked to submit the monthly progress made in new formats prescribed by RBI and ministry of finance indicating revised villages,” he said at the 115th SLBC meeting, here today.
The RBI had suggested Karnataka to adopt two models - One district - many banks or One district — one bank - to achieve the financial inclusion programme. However, the One district — one bank model is found to be working better in the state, said Ajay Seth, finance secretary, government of Karnataka. Under this model, 249,063 no frills accounts have been opened in the selected districts for payment of wages to NREGA workers and social security pensions as against 176,154 accounts opened in the one district, many banks model.
As part of the financial inclusion programme, the banks are implementing electronic wages and benefit transfer scheme on a pilot basis in Bellary, Chitradurga and Gulbarga (including Yadgir) districts under One district many banks model. Under the One district one bank model, State Bank of Mysore is implementing the project in Chamarajanagar, Vijaya Bank in Mandya and Axis Bank in Dharwad. The two models are implemented simultaneously and better of the two will be adopted for the rest of the state.
Making his observations at the SLBC meeting, here today, he said he bank officials in the designated districts are working on a part-time basis to achieve the desired financial inclusion goals. The banks need to provide adequate resources to achieve targets under the “one district many banks” model.
