Union Finance Minister Nirmala Sitharaman on Sunday said despite the huge thrust on financial inclusion and high economic activity, there are districts in the country not having any banking presence at all.
She asked the lenders to get their act together and open either a full-fledged brick-and-mortar branch or an outpost rendering banking services, wondering how banking presence eludes even pockets which have high economic activity.
It can be noted that policymakers have been focusing on financial inclusion for over a decade and also had set a target of ensuring banking presence in every village with a population of over 2,000 people. A few years ago, the RBI had liberalised branch opening norms for banks.
"Even today, there are very many districts in which even big panchayats don't have a physical bank...There are very many districts in which not even one banking institution is physically present," Sitharaman said, speaking at the 74th annual general meeting (AGM) of the industry lobby group Indian Banks' Association (IBA).
She exhorted the IBA members to digitally map all the districts to see the areas having low coverage for themselves and accordingly make provisions for either a physical branch or an outpost. "You should be able to see the centres of economic activity. Be it a completely rural pocket but if the economic activity is strong there, wouldn't you think there should be some kind of presence?,” she asked.
Making it clear that she is not against digitisation, which has paid tremendous cost benefits to lenders in terms of outreach, Sitharaman wondered how there can be parts of country which do not have even a single brick-and-mortar branch.
The minister cited the case of a highly persuasive lawmaker who has been making appeals for a bank branch in an area witnessing high agricultural-related trading.