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Till recently, financial inclusion was nothing more than an onerous, target-driven corporate social responsibility for banks. But these days, the once-unbanked people are now spoilt for choice with multiple bank accounts, inclusive of zero balance and free debit card facilities, at least in two districts of West Bengal, namely Cooch Behar and Horwah.
The direct cash transfer of subsidy has led banks into a slug-fest, for acquiring new rural customers. The stake, Rs 3 lakh crore— the annual subsidy bill of the government --is big enough for banks to set tall targets to tap the smallest clients of the banking industry.
In West Bengal, the work for direct cash transfer of subsidy has started in two districts so far—Howrah and Cooch Behar-- but banks have already instructed the district heads to open as many accounts as possible.
Door-to door campaigns, special account opening drives on Sundays, appointment of new business correspondents, are some the new initiatives that banks have taken to acquire new customers.
“There are people who are being approached by two to three banks at the same time for opening accounts. Ultimately, the choice lies with the customer, and which bank the person chooses to link her or his Aadhar number,” said an executive of United Bank of India.
Allahabad Bank, for instance, sees business opportunity of Rs 8000-10000 crore under the direct cash transfer plans, according to a bank official.
“If the government decides to give LPG subsidy and scholarships through aadhar-linked bank accounts, that will definitely trigger a competition among banks,” said S Chandrasekharan, executive director, UCO Bank.
In the second phase of the rollout of direct cash transfer of subsidy, about 12 schemes will be implemented in the two districts in West Bengal. In Cooch Behar alone, about 311 business correspondents have been appointed by different banks over the last few months for opening bank accounts.
“This is a business opportunity we need to harness. We have opened most bank accounts in most of the villages we were allotted by the State Level Bankers Committee. In addition, we are opening account in other districts as well,” said a bank official of Allahabad Bank.
Apart from Howrah and Cooch Behar, the direct cash transfer of subsidy is slated for rollout in Bankura, Burdwan, Purulia, 24-Parganas (N) & 24-Parganas (S), on a pilot basis soon.
“Opening new bank account also gives opportunity of new businesses like selling education, housing loans and fixed deposits schemes. It is a healthy competition among banks,” said an official of the United Bank of India.
Rural and semi-urban areas are major sources of deposits for scheduled commercial banks in West Bengal. Rural deposits account for 30 per cent of gross bank deposits by SCBs in West Bengal, whereas rural credit account for 19 per cent of the aggregate bank credit in the state. For the whole country, rural deposits account for 10 per cent of gross bank credit and 8.3 per cent of aggregate bank credit, according to data from the Reserve Bank of India.
