New Delhi: Rajasthan, that goes to the polls in November, will soon start rolling out a programme to provide banking access to at least five million poor families—and also open their accounts with a little gift of money.
The initiative of the Vasundhara Raje-led Bharatiya Janata Party government comes in the wake of the Union government’s ambitious and populist farm loan waiver programme that saw around Rs71,680 crore of bad loans by farmers being written off by banks.
“The chief minister met district collectors on this issue today (Tuesday). The state government is proceeding with the launch of Project Bhamashah, which aims to provide financial empowerment to the poor,” said a state government official who did not wish to be identified. He added that Punjab National Bank will be one of the front-runners in this project.
Bankers say Raje wants to complete the project by September. “The new initiative will bring the point of service or PoS to as close as 3-4km,” said a senior bank official, refusing to be identified.
Under the programme, banks will open no-frills accounts in the name of the woman of the household. Biometric identification or thumb impressions will be used for identification. The programme envisages that around 1,300 PoS establishments will help five million poor households deposit and withdraw money, and also provide other basic banking services.
According to a 2008 Report on Financial Inclusion by a committee headed by C. Rangarajan, chairman of the Prime Minister’s economic advisory committee, Rajasthan has 2.5 million farmer households, of which nearly half have no access to credit. In comparison, only 27.3% of farmer households have no credit access in southern states.
Infrastructure finance company Infrastructure Leasing and Financial Services, or IL&FS, will run the PoS outlets in six out of the seven geographical divisions in the state and Hyderabad-based Bartronics India Ltd will provide the biometric technology in the seventh.
“We have begun work on enrolment of BPL (below the poverty line) families... We are confident that the process of setting up the required infrastructure will be done by September 2008,” said a senior executive at IL&FS who did not wish to be identified.
Raje’s government will gift Rs1,500 to each of the five million accounts as a starting deposit. “Besides, the annual fee to IL&FS is somewhere around Rs44 lakh; the state government will also spend money in managing and maintenance of PoS, besides paying Rs12 per transaction as fee to IL&FS,” said the bank official.
The IL&FS executive refused to provide details of the deals.