Govt steps on the pedal to expand banking in NE | business | Hindustan Times
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Govt steps on the pedal to expand banking in NE

business Updated: Aug 14, 2011 22:27 IST
Mahua Venkatesh
Mahua Venkatesh
Hindustan Times
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Even as the government has embarked on a aggressive exercise to expand the banking network, of the total 71 unbanked blocks in the country, 70 are in the northeast, while one is in Jammu and Kashmir.

In a recent meeting with bankers, the finance ministry has asked them to come up with a plan to increase banks in the northeastern states. Finance minister Pranab Mukherjee has asked State Bank of India chairman Pratip Chaudhari to present a status report on the progress to expand the banking network in the region.

The government has asked banks to chalk out ways to improve connectivity in these states including Assam, Arunachal Pradesh, Manipur, Meghalaya, Nagaland and Tripua.

At present, security concerns, inter-tribal tensions and widespread insurgencies are some of roadblocks plaguing the sector. Besides, some of these states’ border with several other countries including China, have affected development in the area while providing a barrier to the tourism industry. Tourist movements are restricted in the region due to security issues.

“These states have remained outside the banking net largely due to political unrest,” a chairman of a public sector bank who was present at the meeting told Hindustan Times. State-owned banks have been asked to concentrate in the development activities of these states.” Most of these states also face serious problems of connectivity.

Mukherjee, last year, met chairmen of regional rural banks to understand problems of the unbanked areas. He also met chiefs of state-owned banks and chief ministers of various states to understand local issues. The Centre has underlined the need for states and bankers to work in close co-ordination to expand the scope of financial inclusion while providing credit to the productive sectors in the unbanked areas.