IBA’s rural mantra: branchless banks | india | Hindustan Times
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IBA’s rural mantra: branchless banks

india Updated: Mar 04, 2010 22:19 IST
Mahua Venkatesh

With the government keen on expanding financial inclusion, the Indian Banks’ Association (IBA) is working out a strategy to facilitate branchless banking in villages.

Remote villages with a population of just 2,000 could get micro automatic teller machines (ATM) for banking transactions, which would effectively meet a promise to this effect in Budget 2010-11.

Finance Minister Pranab Mukherjee had said in his Budget speech that all villages with a population in excess of 2,000 would get banking facilities by March 2012.

“We are looking at facilitating branchless banking services in most of the villages,” MV Nair, chairman IBA told Hindustan Times.

Micro ATMs, which take up limited space for installation, would easily facilitate the smaller transactions normally seen in villages.

The National Payment Corporation of India — recently set up and promoted by banks to boost infrastructure for a national retail electronic payment system — is working along with the IBA on the plan.

However, the banks are yet to finalise a rural strategy.

Besides ATM facilities, banks are also looking at a significant increase in the number of banking correspondents — authorised agents who can carry out banking activities — to extend the scope of financial inclusion in the hinterland.

The move would also ensure that villagers do not have to undertake 20-30 km journeys to access a bank.

The state-level bankers’ committees is expected to meet soon to come up with a concrete strategy to cover villages.