Speed up financial inclusion: FM to Banks

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New Delhi, May 14 (UNI) Finance Minister P Chidambaram today advised the banks to speed up the task of financial inclusion saying only 41 per cent Indians have bank accounts.

Mr Chidambaram said banking the un-banked population brooks no delay, and asked the public sector banks to take this up on a priority basis.

The Finance Minister was speaking at the inauguration of Punjab National Bank's (PNB) first Micro Finance Branch at Mukundpur (West Delhi).

The objective of this branch is to meet the common man's financial requirements, which include credit, kinsurance and investment products.

''Every household in the country must have bank account. I urge the banks to link every household to the banking system,'' he said Under the UPA government's financial inclusion objective, every household must have a bank account. The Centre defines financial inclusion as ''the process of ensuring access to the financial services and flow of timely and adequate credit for vulnerable groups such as weaker sections and low income groups at an affordable cost.'' The committee on financial inclusion, headed by former RBI Governor and Chairman of Prime Minister's Economic Advisory Council C Rangarajan has recommended a slew of measures including a larger role of rural banks.

It recommended that commercial and regional rural banks should open 250 new accounts per branch every year, with the focus on financing marginal farmers and poor non-cultivator households.

Mr Chidambaram said, ''the banks should lend to the very poor people such as cobbler, barber washerman, carpentar, mechanics, laborers and those carrying out small occupations.'' He pointed out that only seven per cent of villages in the country has the banking facilities and 81 per cent of the villages do have banks with within two kilometers.

''Only 41 per cent of the Indian population has the bank account,'' Mr Chidambaram said.

He advised the gathering to cultivate the habit of banking and deposit the money with the bank, and when in need should come to the bank to borrow the money, instead of going to the moneylenders who charge at exorbitant rates.

PNB Chairman and Managing Director K C Chakrabarty said the new branch is fully computerised, equipped with all modern banking facilities such as ATM, lockers, Q-Management, insta-remit and internet.

The major focus of the branch will be to provide basic banking needs, savings accounts and credit either singly or under group approach with a motive to enhance income levels of poor population of this locality and nearby areas.

The branch has more than 12000 no-frill accounts before its launch and 127 self help groups have been attached with the it availing an aggregate credit facility of Rs 1.12 crores.

Jile Singh Chauhan, MLA, Mukundpur during his address praised all staff members in opening this 1st Micro Finance branch and extended his wholeheartedly support in bringing the masses of the area to the branch for opening their accounts.

UNI MP BJR GC1834

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