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LATEST NEWS UPDATES | Rural penetration of banks has increased, says RBI-AJ Vinayak

Rural penetration of banks has increased, says RBI-AJ Vinayak

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published Published on Apr 18, 2012   modified Modified on Apr 18, 2012

The RBI’s monetary policy statement for 2012-13 has said that penetration of banks in rural areas has increased.

It said that banks are now providing banking services in rural areas through 1,38,502 outlets. This includes 24,085 rural branches, 1,11,948 business correspondent outlets, and 2,469 outlets through other modes.

In early March 2010, banks had only 21,475 brick and mortar branches in rural areas.

No-frills accounts

No-frills accounts have increased to around 99 million with an outstanding balance of above Rs 8,700 crore and with the addition of about 50 million new no-frills accounts since April 2010.

The statement said that the focus will now be more on the number and value of transactions in no-frills accounts and credit disbursed through information and communication technology (ICT)-based business correspondent outlets.

For this purpose, banks have been advised that the financial inclusion plan prepared by their head offices is disaggregated at the respective controlling offices and further at the branch levels.

They were also advised to put in place a mechanism to monitor the progress at these levels periodically.

Roadmap

The statement said that in pursuance of the announcement made in the Monetary Policy Statement of April 2010, the roadmap to provide banking services in every village with a population above 2,000 was finalised by state level bankers’ committees (SLBCs).

Under the roadmap, 74,414 villages with a population above 2,000 were identified as un-banked, which were allocated to various banks, including regional rural banks (RRBs), for providing banking services by March 2012.

Banks have covered 74,199 (99.7 per cent) of these un-banked villages. Now the challenge is to cover all the un-banked villages of the country.

The RBI monetary policy statement proposed to mandate SLBCs to prepare a roadmap covering all un-banked villages of population less than 2,000 and notionally allot these villages to banks for providing banking services in a time-bound manner.

It said that detailed guidelines in this regard will be issued separately.

The Hindu Business Line, 17 April, 2012, http://www.thehindubusinessline.com/industry-and-economy/banking/article3323489.ece?homepage=true&ref=wl_home


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