Taking a step ahead of the UPA Government’s scheme to cover un-banked rural households, the Narendra Modi Government’s new Financial Inclusion Mission will cover urban households, too. The Prime Minister is expected to announce this mission in his Independence Day speech on August 15.

On Thursday, Finance Minister Arun Jaitley called a meeting of heads of public sector banks and financial institutions to draw a blueprint of the mission. The aim is to open 7.5 crore bank account in a year, which will include 1.5 crore in urban areas and the rest in rural areas. At present, around 41 per cent of the population does not have any banking facility. Bank heads expressed confidence in meeting the target set by the Government, that too at a lower cost. Arun Kaul, Chairman and Managing Director of Kolkata-based UCO Bank, said technology could bring down costs, while SL Bansal, CMD of Delhi-based Oriental Bank of Commerce, said banks were in a position to absorb small expenditure in expanding financial inclusion.

Marked shift

In the meeting, Jaitley said the new programme will provide households with facilities of savings, credit, remittances, insurance and pension, among others. This is a marked shift from the earlier effort where only opening of accounts was the focus of the financial inclusion drive. He said the Government’s aim was to have a banking facility in every village, within a reasonable distance, and every household should have at least one bank account within the timeframe of one year.

“This is a big challenge and there are several difficulties, such as lack of connectivity, infrastructure facilities,” he said.

The mission will be completed in two phases, starting from August 15 this year.

The first phase will get over by August 14, 2015, and the second phase by August 14, 2018. Most of the activities will be done in the first phase, while insurance and pension would be covered in the second.

Later, while talking to newspersons, Jaitley said this campaign for inclusion will be at various layers, which includes brick and mortar branches, smaller branches, kiosks, ATMs besides human contact through business correspondents.

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