Punjab National Bank (PNB), India’s fourth largest bank by assets, began a pilot project on 3 October in Rajasthan to give “no-frill accounts” to people residing in rural areas as part of a new financial inclusion programme that could help grow its total customer base almost three fold to 100 million in the next four years.
Financial inclusion, or making mainstream financial services available in a fair and transparent manner to people who currently do not have access to them is an area of focus for the bank, said K.C.Chakrabarty, PNB’s chairman and managing director, at a press conference on Thursday.
The pilot project launched in Rajasthan marks the beginning of the bank’s efforts at financial inclusion.
The bank, which has a strong branch presence and brand equity in North India, aims to extend this initiative to 10 states at a total cost of Rs1.5 crore.
The bank’s Rajasthan programme will use business correspondents—agents trained by PNB, who will not be on the rolls of the bank—to target villages where the bank has no branch.
The agents will carry out basic banking business, including credit disbursal and sale of financial products such as health insurance.
PNB will issue smart cards to rural customers to carry out the transactions. Though it believes that the project will be financially viable, the bank is hopeful of getting a subsidy from the Reserve Bank of India, said Chakrabarty.
PNB plans to open one million no-frill accounts by March 2008, to add to its existing 266,000 accounts. It proposes to extend the scheme to 15 million households by 2010.