Ad Here  
October
November
December
January
February
March
 
 
Drop in SLR- sparing lendable resources Managing NPAs... A development bank for BRICS Smart banking in smart cities United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Just 660 days! Target over-ambitious... A bank for women, by women Small is ‘more’ beautiful Good, bad and ugly Reaching out: is it slowing down? Two banks: their jubilees and performances Monetary policy continues to adopt dis-inflationary path Payment banks have arrived Targets continue to be ad hoc Insatiable appetite for credit Growing gainfully Grows Bigger The collaboration suite of cyber criminals New capitals of Migrant banks Ernakulam excels... Bottomlines shrink, bad loans rise... Stage set for Indian ‘avatar’ of foreign banks Financial inclusion vs unclaimed deposits Anytime banking to anywhere banking Banking on Risk What is the priority – mergers or NPA reduction? Governance in Reverse Gear? Lacklustre credit expansion Big bank merger, bigger expectations Why any time money? Thirty more cities seek to become SMART Cut in repo rate – lower than expected Cradle of banks to a smart city... Small finance payment banks... Indian customers are tech savvy Cautious and considerate One down in private sector Well-lived... Why priority status? From lazy banking to easy banking How okay are new banks? Perhaps small is more beautiful than big! Greet Lakshmi the banking robot Reaching the Unreached… Rationalised Who is the real beneficiary? Aadhaar, niraadhaar and banking Capital base of regional rural banks raised Another route for achieving financial inclusion Small finance banks offer high interest rates Nothing much can happen…. Emerging crisis Banking overhauling or reorganisation? New bank licences, at last... Bank deposits account for 46.3 per cent of household savings LVB- A supermarket of financial services It’s a war on black money, support it. Drastic decline in asset quality A new development bank rising in the east… Fund healthcare clinics in villages... How ‘secure’ are the secured loans? Banking in Telangana Holy or unholy? The paradox: clamour for the Goliath and David Hesitancy in announcing year-end results Too big to fail and too small to sail Mega merger is on All that glitters is not gold... Growing volume of stressed assets… Needed a Banking Atlas Merger mania haunts banks Ferrying digital banking to Lakshadweep
 
Just 660 days! Target over-ambitious...
RBI has been concerned with the health of the Indian banking sector. But rarely has it probed into the wealth of banks, symbolised by the width of the customer base or the strength of its service points. In fact there were stringent regulations regarding locations of new branches.

For nearly a decade we have been talking about financial inclusion. Ever since the Dr. Rangarajan Committee asserted that financial inclusion is no more an option, but a compulsion, banks have been announcing their achievements in reaching out to the unreached. In claiming their successful sojourn into the unchartered areas, they are not comparing their data with the benchmark data. There is the thoughtfully framed slogan ‘Step into a bank and step out of poverty.’ But the banking sector has to travel a long distance to enable the aam aadmi to step into the nearest branch. True, many steps have been taken to facilitate access to banking. Account opening norms have been diluted and accounts can be opened with zero balance. Branch licensing policy has been liberalised to enable banks to open branches in unbanked areas. Better still, branchless banking has been accepted.

 

Financial inclusion...

The RBI appointed a Committee on Comprehensive Financial Services for Small Business and Low Income Households, with a mandate for framing a clear and detailed vision for financial inclusion and financial deepening in India. The report has six stellar statements to achieve full financial inclusion and financial deepening. One of them is having Universal Electronic Bank Account (UEBA).

While this is salutary, the target dates suggested are over-ambitious. Under the UEBA, by 1 January 2016, every Indian above 18 years of age  would have an individual, full-service, safe, and secure electronic bank account. It is certainly possible, as many developing countries have already achieved this goal.

According to the IMF Financial Access Survey: 2012, developed countries have about 3000 deposit accounts per 1000 adults. Comparative figure for India is 1042 per thousand adults. Japan has a high 7285 deposit accounts per 1000 adults, while mainland China has an unbelievably low figure of 35.

 

The Indian scenario…

For a population of 125 crore, commercial banks in India have 90 crore deposit accounts. Despite KYC data being religiously collected and updated by banks, no estimates of the actual number of depositors are available. Bank customers, who have savings bank deposit accounts, invariably have a fixed deposit account also.

By the way, the Committee has not given any indication of the number of new accounts to be opened before the target date. It is not clear as to whether the zero balance accounts have to be converted into UEBA. New numbers have to be given to them, which already have 14 digits.

The census does not have information on the number of adults of 18 years and above. No estimates are readily available as to how many of them are already bank depositors as on date.

Ensuring every adult in India has electronic bank account within the next 22 months would be difficult. Although mobiles have penetrated into thousands of villages, where neither electricity nor telephones could reach, banks may not reach out to the target groups in 660 days. Target dates may be fixed more realistically on a region-wise basis, taking into consideration the inadequacies of the necessary infrastructure facilities.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com