RBI Dy Chief worried over large dormant saving bank accounts
Updated: Jun 08, 2013 02:07:27pm
Mumbai, Jun 8 (KNN) Expressing concern over inadequate financial inclusion, Reserve Bank of India deputy governor KC Chakrabarty said that nearly half of the saving bank accounts remain dormant.
“Nearly half of the basic savings bank deposit accounts are not seeing transactions. This not only restricts the potential benefits that could accrue from increased financial access but also reduces the viability of Financial Inclusion activities for banks and banking correspondents (BCs). The reduced viability, in turn, impacts the scalability of the model, thereby hampering Financial Inclusion efforts,” Chakrabarty recently said here, addressing a conference.
Also dissatisfied over the large number of villages remaining unbanked, he said that as many as 2.70 lakh banking outlets are now available across the country.
The RBI is also contemplating starting bank facilities in about 4,85,000 unbanked villages with population of less than 2000 and the same have been allotted to banks. In this regard State Level Banker’s Committee has been advised.
The banks have successfully achieved the target of ensuring provision of banking services through a banking outlet in every village with population above 2000 by March 2012.
However, he was concerned that despite improvement in technology, banks were unable to cut down the cost of providing financial services.
“Beneficiaries or stakeholders often complain of constraints in digital and physical connectivity. This coupled with delays in issuance of smart cards, reliability issues in hardware infrastructure such as hand held devices have impacted the quick roll out of financial services across the country. It is, indeed, disheartening to note that India, despite being the software service provider to the world, is unable to develop reliable software solutions and back office services for supporting our own FI activities,” he said.
He also conveyed the bank’s constraints in seeding the bank accounts with Aadhaar numbers which according to him could impact the roll out of the Government’s DBT initiatives.
He further said that all banks have been asked to open accounts of all eligible individuals through organising camps with the support of local Government authorities and all accounts should be given an Aadhaar number. He further stressed the need to put in place an effective mechanism to monitor and review the progress in implementation of DBT.
He apprised the guests that an integrated approach had been adopted for achieving financial inclusion through financial literacy.
Meanwhile, Financial Literacy Centres and rural branches of scheduled commercial banks have been advised to conduct outdoor Financial Literacy Camps at least once a month to promote the habit of saving amongst masses.
The financial inclusion programme has seen success over the past few years with 37,471 branches conducting such programmes in 2011- 12 and 40,845 in the financial year 2012-13. (KNN)
“Nearly half of the basic savings bank deposit accounts are not seeing transactions. This not only restricts the potential benefits that could accrue from increased financial access but also reduces the viability of Financial Inclusion activities for banks and banking correspondents (BCs). The reduced viability, in turn, impacts the scalability of the model, thereby hampering Financial Inclusion efforts,” Chakrabarty recently said here, addressing a conference.
Also dissatisfied over the large number of villages remaining unbanked, he said that as many as 2.70 lakh banking outlets are now available across the country.
The RBI is also contemplating starting bank facilities in about 4,85,000 unbanked villages with population of less than 2000 and the same have been allotted to banks. In this regard State Level Banker’s Committee has been advised.
The banks have successfully achieved the target of ensuring provision of banking services through a banking outlet in every village with population above 2000 by March 2012.
However, he was concerned that despite improvement in technology, banks were unable to cut down the cost of providing financial services.
“Beneficiaries or stakeholders often complain of constraints in digital and physical connectivity. This coupled with delays in issuance of smart cards, reliability issues in hardware infrastructure such as hand held devices have impacted the quick roll out of financial services across the country. It is, indeed, disheartening to note that India, despite being the software service provider to the world, is unable to develop reliable software solutions and back office services for supporting our own FI activities,” he said.
He also conveyed the bank’s constraints in seeding the bank accounts with Aadhaar numbers which according to him could impact the roll out of the Government’s DBT initiatives.
He further said that all banks have been asked to open accounts of all eligible individuals through organising camps with the support of local Government authorities and all accounts should be given an Aadhaar number. He further stressed the need to put in place an effective mechanism to monitor and review the progress in implementation of DBT.
He apprised the guests that an integrated approach had been adopted for achieving financial inclusion through financial literacy.
Meanwhile, Financial Literacy Centres and rural branches of scheduled commercial banks have been advised to conduct outdoor Financial Literacy Camps at least once a month to promote the habit of saving amongst masses.
The financial inclusion programme has seen success over the past few years with 37,471 branches conducting such programmes in 2011- 12 and 40,845 in the financial year 2012-13. (KNN)
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