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Top bankers sweat out in rural India to rope in un-banked homes

Under PM's Jan Dhan Yojana, bankers travel across the country to convince tribal communities to open bank accounts

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Far away from his plush headquarters, chairman of a mid-sized public sector bank is busy devising strategies, sitting in an unfamiliar setting -- a rustic tea shop in Kanhupur village in Odisha's Kendrapada district. He is stationed there for a week as part of the prime minister's Jan Dhan Yojana team from his bank, giving his officers moral boost in their long-drawn efforts to convince tribal communities to open bank accounts.

"Some of the families closed the door, saying that they don't need bank accounts. We have one more day to achieve our target in the village. Financial inclusion in tribal villages is difficult. But the district administration is also extending support in terms of manpower and basic infrastructure for the programme as they also have targets as facilitators," he said, sharing his concern over achieving the target in one day.

Urban branches of banks are nearly deserted with most officers including chairman and other top officers are in the field trying to meet their targets for the PM's flagship programme. On Wednesday evening, phone lines of most CMDs were not reachable as they were huddled in one of the thousands of camps the banks had set up.

Of course, the programme is an extension of the financial inclusion plan of the previous government, but Modi believes that calling it by another name and galvanising the 14 lakh bank employees giving them a tight deadline of a year may work better.

Jan Dhan programme plans to provide bank accounts to each un-banked household. It is estimated that around 7.5 crore households (six crore in rural and 1.5 crore in urban areas) will be linked to the banking system.

So, you like it or not, financial inclusion is happening in far-away villages like Gunji in Uttarakand, which is a 3-day trek from the nearest motorable road, located in the Chempawat district.

Bankers have however continued to face the real challenges of the financial inclusion programme. What is more worrying them is that each account also incurs an annual maintenance of about Rs 100. But, in the long run, the huge network of bank accounts is expected to plug the pilferage in the direct benefit transfers and banks hope to earn commissions by running government programmes. If worked well, this is a big advantage because the government and the banks can keep a tab on the beneficiaries of the subsidy schemes, says a banker.

Far-flung villages of Kazinapanuli, Kothera in Chemapat district in Uttarakhand, villages from Kedarnath and the hilly terrain of Himachal Pradesh will be linked to the banking system and to Delhi for direct benefit scheme.

Public sector banks together plan to set up 60,000 camps so that about 1 crore new no-frills accounts will be opened simultaneously when Narendra Modi launches the programme.

The basic bank account will be accompanied by RuPay debit card having inbuilt accidental insurance cover of Rs one lakh. Further an overdraft facility of up to Rs 5,000 will also be permitted to the Aadhar enabled accounts after the satisfactory operation of the account for at least six months.

State Bank of India (SBI), the country's largest bank, has targeted 20 lakh accounts by setting up 10,000 camps in rural and urban centres. Even small banks such as Andhra Bank are setting up over 2,000 camps with a target of 2.75 lakh accounts.

CVR Rajendran, chairman and managing director, Andhra Bank, said, "I am in east Godavari district trying to get people who got left out in our earlier exercise to be included.

Our biggest challenge is in the tribal areas and now the Naxal areas are more peaceful."

According to the targets submitted by 25 public sector banks to the finance ministry, banking network will reach at least 10,000 unbanked villages by 2016.

Each bank has submitted a detailed financial inclusion plan to the ministry of finance for implementation over the next two years. Aadhar numbers will be used to open the accounts and the accounts will be used for subsidy transfer.

Jan Dhan Yojana is a scheme which targets opening of at least fifteen crore accounts in the next four years. The plan is to provide at least two bank accounts in 7.5 crore households in the marginalised section of the society. The scheme will be monitored by a mission under the finance minister. For the checks and balance, both biometric and demographic data will be collected by the bank.

The maximum villages will be covered by the Allahabad Bank, which will cover 566 unbanked villages in 2015 and 888 villages by the end of March 2016, almost eight times more than its unbanked area coverage of 2014 at 121.

Similarly, SBI will almost double its number of unbanked village coverage from 608 in March 2014 to 1,108 in March 2016.

A senior official in the ministry of finance told dna, "The accounts will be opened on the basis of Aadhar numbers. Also these accounts will be used for transfer of subsidies under the Direct Benefit Transfer scheme."

To make the system fool proof, the government is looking at various ways. "The data of the account holders both demographic as well as biometric details will be collected while opening the accounts. They will then be issued biometric multi-function card. All the financial transactions will be through field devices, which will support multiple application," the official said.

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