Govt to roll out banking services in 20K villages
New Delhi: Finance Minister Pranab Mukerjee on Thursday said banking services will be rolled out in 20,000 villages this fiscal, but warned the banks against selecting wrong entities as their business correspondents — persons acting as intermediaries between rural people and banks.
"For the year 2010-11, we have set a target of rollout in 20,000 villages. I am confident that this target will be achieved," Mukherjee said at the launch of `Swabhimaan`, the financial inclusion campaign of the government.
He further said business correspondents (BCs) are the face of the banks and they should be conscious of reputational risks that could arise if the wrong kind of BCs, or those who are providing technology as backup, are selected.
BCs are persons, who besides helping rural people to open bank accounts, would facilitate in banking transactions.
Mukherjee added that the government has targeted to cover at least 73,000 new habitations with a population of 2,000 and above and open at least 5 crore new account by March, 2012 under the campaign.
He said according to CSO estimates, the agriculture sector is poised to grow at 5.4 per cent in the current fiscal, compared to 0.4 per cent a year ago.
This has happened partly due to the phenomenal growth in bank credit to the sector, he added.
"This is a big improvement and is partly due to the tremendous growth in bank credit to the agriculture sector which is expected to cross the target of Rs 3,75,000 crore set for the year," he added.
Mukherjee said that only about 38 per cent of bank branches are in rural areas, providing coverage to 40 per cent of the country`s population.
Besides, 51.4 per cent of farmer households in the country are financially excluded from both formal and informal sources of credit.
Overall, 73 per cent of farmer households have no access to formal sources of credit, he added.