Banks seek capital subsidy for financial inclusion

Banks have sought capital subsidy and other incentives from the Uttarakhand government to complete the financial inclusion process in the hill state where most of the villages are situated in remote areas. At a meeting held in New Delhi as an initiative of the Reserve Bank of India (RBI), the banks’ officials were of the view that since providing banking facilities in far-flung villages affected profitability of the banks, the government must provide some incentives to the banks. Representatives from 12 banks participated in the meeting.  Under the financial inclusion programme, a total of 475 villages have to be provided with banking facilities through branches or business correspondents (BCs).  According to the RBI guidelines, villages with population above 2,000 have to be included in the financial inclusion process. But under the Atal Gram Yojna, most of the villages have less than 2,000 population. “We have set up a sub-committee under the State Finance Secretary. This committee will organise a meeting to look into the various demands of banks in this regard,” said Principal Secretary (Finance) Alok Jain.