FM priority to financial inclusion

New Delhi, March 12: Finance minister Pranab Mukherjee today said financial inclusion was the biggest challenge in India and urged banks to reach out to areas with a population of over 2,000 by March 2012.  “Financial inclusion is an important priority of the government as only 38 per cent of the banks are in rural areas and only 40 per cent of the country’s population have bank accounts,” the finance minister said at an industry event.  To address this need, Mukherjee said, “I had in 2010-11 directed all banks to provide appropriate banking facilities to habitations having population in excess of 2,000 by March 2012 using various models and technologies, including branchless banking through business correspondents.”  There are around 73,000 such areas that have more than 2,000 people. While banks will cover 20,000 villages this year, the remaining 53,000 will be covered in 2011-12.  Earlier, RBI Governor D. Subbarao had said aspirants for new banking licences would need to show their commitment towards financial inclusion.   The RBI has asked existing commercial banks, including foreign lenders, to come out with their financial inclusion plans.   ICICI Bank managing director and CEO Chanda Kochhar had also underlined that rural markets will be the future growth engine.  “Rural India is going to be the market of tomorrow. Therefore, it is important for us to find business models for the rural population,” Kochhar had told reporters earlier this month.             The Telegraph