<http://business.rediff.com/report/2010/may/12/sbi-to-reach-12000-unbanked-villages.htm#write>
State Bank of India (SBI [ Get Quote<http://portfolio.rediff.com/quotes/state+bank+of+india>]) wants to extend its footprint to 11,943 unbanked villages, with a population of at least 2,000, this financial year. The country's largest lender recently submitted its plan to the Reserve Bank of India (RBI). RBI had asked all Indian banks to submit their plans on financial inclusion, duly approved by their respective boards. The central bank also wanted to know the coverage plan for unbanked villages. Out of 6,00,000 villages in the country, about 64,000 villages with a population of more than 2,000 are deprived of a formal banking channel. The proposed target for SBI shouldn't be difficult as the bank has already extended banking facilities to 1,00,000 villages, that were unbanked before. According to the plan submitted to the central bank, SBI will open branches in 512 villages, while the rest will be covered by ,business correspondents (BCs). The state-run lender will start charging customers who are accessing banking facilities in the unbanked villages through the BC model, a senior official from the bank said. RBI has allowed banks to charge such customers. *Other banks on target too* Other public sector banks are also gearing up for the expanded financial inclusion project and have submitted their plans to RBI. Bank of India is planning to extend banking services to 7,000 such villages in the next three years, of which 2,100 will be covered before March 31, 2011. Bank of Baroda [ Get Quote<http://portfolio.rediff.com/quotes/bank+of+baroda>] will be extending services to 3,000 unbanked villages, with a population of more than 2,000 in the current year. Union Bank of India [ Get Quote<http://portfolio.rediff.com/quotes/union+bank+of+india>] also aims to provide banking facilities at least once a week to 4,500 villages having more than 2,000 population. In addition, Union Bank will spread banking services to 2,500 unbanked villages, over and above the plan that has been submitted to RBI. *BC guarantee plan rejected* The central bank has, however, rejected SBI's proposal to secure a guarantee from BC. In recent interactions with finance ministry officials, several bank chiefs said one of the biggest challenges they face is the appointment of BCs as they carry the bank's name and the risk. In order to mitigate the risk, SBI had mooted the proposal of asking for a security from the correspondents. The other challenge, bankers pointed out, is the initial cost for extending banking services to areas that are not expected to generate volumes. According to SBI's estimate, the cost of offering banking services to the unbanked villages could be around Rs 1.25 lakh a year. The government has already said it was open to the idea of subvention to banks in the initial years for promoting financial inclusion. http://business.rediff.com/report/2010/may/12/sbi-to-reach-12000-unbanked-villages.htm -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
