India is poised for a giant leap in its drive to ensure financial inclusion for the masses. During a meeting held between government officials and representatives of 25 large microfinance companies on August 11, the companies committed that they would endeavour to open 30 million new bank accounts within a year. They plan to achieve this target by leveraging their tie ups with banks.
The Centre has proposed a comprehensive financial inclusion programme that will cover households in both urban and rural India. It has also been envisaged to increase the scope of the National Pension Scheme to cover disadvantaged sections of the population. According to reports, the government is looking to provide a basic bank account that will have an overdraft facility of Rs5,000 along with a RuPay-enabled debit and ATM card and accident insurance cover of Rs 1 lakh. A credit guarantee fund will also be created to cover defaults in overdraft accounts and the microfinance industry could also provide collection services to banks besides assisting in improvement of financial literacy. The Government plans to link these accounts to enable direct cash transfers and also align them to Aadhaar for eKYC (electronic know-your-customer rules).
Census 2011 had estimated that around 59% of 246.7 million households across India have access to banking services. The initiatives being undertaken towards universal financial inclusion by the Government along with the private sector promise to have a far reaching impact on the overall welfare of citizens across the country.