New Delhi: The Reserve Bank of India has asked banks to finalize a roadmap for providing banking services to villages with less than 2,000 population as part of the government's financial inclusion plan and submit the details on the same by August 2012.
"The finalized roadmap with details of allocated villages to various banks should be submitted to the respective regional office of Reserve Bank of India as per format given latest by August 31, 2012," the RBI said in a notification issued Tuesday.
The penetration of banking services to the far-flung regions of the country will ensure smooth implementation of electronic benefit transfers, the RBI said.
"The implementation of Electronic Benefit Transfers (EBT) is expected to be more advantageous as the benefits would reach quickly in the hands of the beneficiaries without any leakages. It would also save the Government the administrative cost...," it said.
Banks must also ensure that there is a brick and motar branch to provide support to business correspondents (BC), who carry out banking services on behalf of a bank in villages.
The brick and mortar branch must be able to serve about 8-10 BCs active within a reasonable distance of 3-4 kilometers.
In the initial stages, priority may be given to providing door step services to EBT beneficiaries through regular visits of BCs to the allocated villages.
However, banks should over a period of time, ensure that all kinds of banking services like remittances, recurring deposit, entrepreneurial credit in the form of KCC (Kisan Credit Card) and GCC (General Credit Card), insurance (life and non-life) and other banking services are available to all the residents of the village through a mix of brick and mortar branch and BC network, it said.
Under the financial inclusion plan, the central government expects to bring in 80% of Indian households into the formal banking network in next five years, up from the 47% now.
As per the central bank's plan, each village with a population of 2000 people should have a banking facility by March 2012.
Notably, in October 2011, Kerala became the first state in the country to complete financial inclusion plan, thereby guaranteeing at least one bank account in each household of the 14 districts of the state and banking facilities within the reach of people.