Banks to have virtual, real presence for villagers

Vijay C Roy

Tribune News Service

Chandigarh, June 18

Banks’ obligation to provide banking facilities in remote villages will no longer be confined to papers. The RBI will soon introduce an online search system that will provide details of banking correspondents dedicated for particular villages.

The banking regulator has taken the decision after it found that positions of village-level representatives (banking correspondents) of several banks, particularly in the northern region, are either vacant or they are not effectively providing services to the local people. Banking correspondents are agents engaged by banks for providing banking services at particular locations where banks cannot open a bank branch or set up an ATM. This is the strategy of the Central government towards 100% financial inclusion.

More than 230 villages in Haryana don’t have any banking outlet. As per the government’s guidelines, people must get access to banking facilities within 5 km of their residence. People living in some of the villages falling in Kurukshetra, Sirsa, Jhajjar, Mahendergarh, Hisar, Sonepat and Karnal districts are the worst sufferers. Currently, the state has over 2,275 banking correspondents serving its rural areas.

Similarly, the Central government’s Financial Services Department has identified over 1,200 villages in Punjab that can be serviced by opening small bank branches or banking correspondents. Although there are 2,447 banking correspondents appointed by various banks to serve Punjab villages, 187 don’t have necessary equipment such as micro ATMs. 

The situation in Himachal Pradesh is also the same mainly due to low population density and inaccessible villages. There are over 300 villages yet to be covered either by bank branches or through banking correspondent in the state.

After the online system is made functional, customers can check availability of the banking facilities in their region and demand services from banking correspondents of their localities. The data will capture name and contact numbers of the banking correspondent. The requirement of online system is felt after the issues related to banking in the remote areas were discussed at state-level bankers committee meet for Punjab and Haryana. 

Senior officials in the RBI confirmed that the online registry is in the making and it will be active soon. The making of banking correspondent detail online would not only help customers but would also help in effective monitoring of banking correspondents, officials said.

Meanwhile, the Indian Banks’ Association (IBA) is formulating a process to certify banking correspondents, which may have basic and advanced level courses to enhance their functional and behavioural competencies. Such initiatives are expected to further strengthen the entire ecosystem, officials of commercial banks said.

“We are also strengthening the network of banking correspondents by providing them required infrastructure which facilitate them to take and give cash on behalf of any bank through the Aadhaar-enabled payment system. It will also give them adequate remuneration,” an executive of a public sector bank said.