By Team Mangalorean Bangalore

BANGALORE, November 24, 2009: The Chairman and Managing Director of Syndicate Bank, Basanth Seth, urged banks in the State to lend "small overdrafts" to holders of no-frill accounts. Addressing the 110th State Level Bankers’ Committee meeting he said banks ought to lend up to Rs. 500 to such account holders.

He urged Banks to take immediate action to ensure that it could meet the RBI target of ensuring 100 percent financial inclusion in villages of 2000 plus population in the state by March 2010.
Addressing the 110th meeting of SLBC here, Mr Seth who is also CMD, Syndicate Bank, said the banks could adopt the RBI’s advice of making use of the business correpondent-BF model, as per the guidelines, to extend the banking services.

He also urged the General Manager of Banks and Regional Heads of the state to complete the process of verification of data received from the government, with the existing accounts of the bank quickly at apex level, to be able to arrive at the number of families who currently do not have an account.

This was in keeping with the RBI’s decision to launch a renewed drive for opening up of no-frills accounts in respect of families who do not have a bank account, on the basis of the data relating to the public distribution system. He urged banks to operationalise the current no frills accounts by providing a small overdraft of Rs 500 to no-frill account holders.

RBI had advised that the existing no-frills accounts should be operationalized by giving small overdraft, GCC, remittances/insurance facility, he said. On performance of the banks, he said as on June 2009, aggregate deposits of scheduled commercial banks stood at Rs 208398 crore registering growth of 25.38 percent compared to Rs 166208 crore in June 2008.

Referring to the decision taken by bankers at a meeting with Chief Minister B.S. Yeddyurappa on October 21, to build houses in the areas affected by the recent floods, Mr. Seth said banks would adopt the income criteria for selecting beneficiaries eligible for subsidised credit. The Model Scheme prepared by the SLBC envisages loans bearing a rate of interest of four per cent under the Differential Rate of Interest (DRI) scheme for eligible cases and eight per cent for others for housing loans under the Indira Awas Yojana and Ashraya schemes.

Mr. Seth said the Electronic Benefit Transfer (EBT) scheme, which is used for making social security pension payments and to those employed under the Mahatma Gandhi Employment Guarantee Scheme on a pilot basis in Bellary, Chitradurga and Gulbarga districts would be extended to three more districts. While the State Bank of Mysore will implement the scheme in Chamarajnagar district, Vijaya bank has been chosen to implement the scheme in Mandya district. Axis Bank, which is privately owned, is to implement the scheme in Dharwad district.
The Regional Director of the Reserve Bank of India, B. Srinivas, said Bangalore would host an international conference on financial literacy on March 22-23.

International Seminar

Reserve Bank of India (RBI) will conduct a two-day international seminar on 'Financial inclusion and Financial Literacy', and discuss various issues and challenges in meeting the objective, Regional Director, RBI Mr Srinivas said today.

Speaking at the 110th meeting of the state level Bankers Committee meeting here , he said RBI will conduct the seminar in Bangalore on March 22 next year. Representatives from SAARC and South Asian countries will participate in it.

He said the seminar, which is also being held to mark the 75th year of RBI. It would be inaugurated by Union Finance minister Pranab Mukherjee. Issues and challenges in the path of achieving total Financial Literacy and inclusion would be discussed.

He said during the event, the Indian model on 'Delivery of Financial Inclusion' would be exhibited.

The RBI official also informed that RBI, with a view to provide an insight into the functioning of the financial institutions including banks and other related agencies have developed a school curriculum to be taught at the primary level as a part of text. ''The Karnataka government had shown positive response to its introduction at school level and taught the subject as a course study'' he said.

He said RBI had also published a booklet on the matter relating to financial management and planning, with a focus on first time earners, he said.