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making it difficult to provide low cost banking services to the unbaked
poor. However, banks do not seem willing to pay reasonably to these
people from the unorganised sector. The poor BCs are paid so low that
people accept this job only if they do not have any other option and at
the very fi rst opportunity, leave the BC’s work. The BC needs to be
paid reasonably and also supported through appropriate ICT enabled
infrastructure. How do we integrate the BC model with the overall
delivery model of the banking services is another challenge for making
financial Inclusion a reality (Chakrabarty 2013, p.14)
Equally Unrealistic is the Nature of Targets Set for Financial Inclusion
Broadly, the operational definitions of financial exclusion/inclusion
‘have evolved from the underlying public policy concerns that many people,
particularly those living on low income, cannot access mainstream financial
products such as bank accounts and low cost loans, which, in turn, imposes
real costs on them—often the most vulnerable people’ [H.M. Treasury (2004)
quoted in RBI, 2008a: 296]. Based on this broad perspective, the Reserve Bank
has approached the subject of financial inclusion with concrete measures to
‘connect’ people with the banking system. Apart from the coverage of villages
with the agency banking arrangement combined with a few ‘bricks and mortar’
branches, the measures initiated include introduction of ‘no-frills’ accounts
(Table 4.47), promotion of financial literacy and responsible borrowing and
encouraging adoption of ICT solutions for achieving greater outreach as also
for reducing transaction costs (RBI, 2008: 38-39). In November 2005, banks
were advised to make available a basic banking ‘no-frills’ account with low
or nil minimum balances. Similar types of accounts, though with different
names, have been extended by banks in various other countries with the same
Table 9.4: Progress in No. Frill Accounts: Targets and Achievements
Parameters
Achievements
Targets
March
2010
March
2011
March
2012
March
2013
1. Number of ‘no-frills’ Accounts (NFAs) opened (in million)
49.55 74.39 109.60 153.30
2. Amount in NFAs (
`
crore)
4,895 6,566 9,311 11,323
3. Number of NFAs with Overdraft (OD) facilities (in million)
0.14 4.20 36.30 53.30
4. NFAs with OD amount outstanding (
`
crore)
9.10 199 1,446 2,228
5. Number of Kisan Credit Cards (KCC) issued (in million)
19.50 22.49 32.30 40.70
6. Amount Outstanding in KCC (
`
crore)
107,519 143,862 152,114 179,255
7. No. of General Purpose Credit Cards (GCC) issued (in million)
0.67 0.95 4.68 8.11
8. Amount outstanding in GCCs (
`
crore)
840 1,308 3,229 5,670
Source:
Chakrabarty (2011)
