Government asks banks to plug NorthEast gap

The government has asked the public sector banks and state governments of the north eastern states to expand banking network in the north-east states.

The government has asked the public sector banks and state governments of the north eastern states to expand banking network in the north-east states. The issue is likely to be brought up in the forthcoming meeting between the chiefs of state owned banks and finance minister Pranab Mukherjee on August 14.

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At present, there are 89 unbanked blocks, of which 80 are in the north eastern states, 5 are in Jharkhand and 4 in Jammu and Kashmir.

The government is also planning to allow regional rural banks to open branches in these areas to expand the scope of financial inclusion. The State Level Bankers Committees (SLBCs) have also drawn up plans for financial inclusion in each state.

A government source, who did not wish to be identified said that the finance ministry has asked the banks to partner the state governments in the development of these states while chalking out ways to improve connectivity in states like Assam, Arunachal Pradesh, Manipur, Meghalaya, Nagaland and Tripura.

Several issues including security concerns, inter-tribal tensions, widespread insurgencies have thrown up tall challenges for the authorities and banks to carry out normal activities in these areas. These states border with several other countries including China. These have affected development in the area while providing a barrier to the tourism industry.