SBI to expand reach to 50,000 villages

State Bank of India plans to cover 50,000 unbanked villages during the current fiscal as part of financial inclusion drive.

"The bank under financial inclusion initiative has planned to cover 50,000 unbanked villages during 2010-11 which will take total reach to 1,50,000 villages," a senior official of SBI told PTI.

To achieve this, the bank plans to hire 15,000 business correspondents, who will help people in the rural areas to open bank accounts.

"In order to expand our presence in the unbanked areas, the bank intends to hire around 15,000 (business correspondents) in 2010-11," the official said.

It is not possible for banks to open branches in every village, so a business correspondent and business facilitator model would help in taking banking facilities to every part of the country, the official said.

Business correspondents are persons who, besides helping rural people to open bank accounts, would facilitate in banking transactions.

Their key role is to accept deposits and remit money. In Budget 2011, Finance Minister Pranab Mukherjee had said, "To reach the benefits of banking services to the 'Aam Aadmi' (common man), the RBI had set up a high-level committee on the lead bank scheme."

After assessing the recommendations of this committee, and in further consultation with RBI, the finance minister had said that it was decided to provide appropriate banking facilities to habitations having population in excess of 2,000 by March, 2012.

"It is also proposed to extend insurance and other services to the targeted beneficiaries. These services will be provided using the business correspondent and other models with appropriate technology back up.

By this arrangement, it is proposed to cover 60,000 habitations," Mukherjee had said.