Make financial inclusion a national priority, Modi tells banks

Prime Minister Narendra Modi on Monday asked banks to make the opening of bank accounts in 70 million households this year a national priority.

The national mission on financial inclusion, called Pradhan Mantri Jan Dhan Yojana, will be launched by Modi on Thursday.

In an email to all bank officers, the prime minister described the task as 'gigantic', but asked banks to put in all their efforts to make sure no one was left without a bank account.

“We need to enroll over 70 million households and open their accounts.

"This is a national priority and we must rise to meet this challenge.

"There is an urgency to this exercise as all other development activities are hindered by this single disability. I am sure we will overcome this situation collectively,” he said.

Under the financial inclusion plan, the government plans to open at least one bank account for every household.

Every account will get a debit card and an accident insurance cover of Rs 1 crore initially.

It will help expand direct benefits transfer on the Aadhaar platform. In the second phase, starting from August 2015, account holders will also be covered by insurance and pension products.

According to a PMO statement, Modi told banks this would be a source of immense satisfaction for them, and that he himself would recognise the achievements of the best performing branches.

“With a bank account, every household gains access to banking and credit facilities.

"This will enable them to come out of the grip of moneylenders, manage to keep away from financial crises caused by emergent needs, and most importantly, benefit from a range of financial products,” he said.

The scheme will be launched on August 28 across the nation simultaneously.

The prime minister will launch it formally in Delhi, with parallel functions at the state level to be attended by union ministers, and also at district and sub-district levels.

Camps will be organised at the branch level.

“I am confident that you will rise to the occasion and contribute to this national endeavour in significant measure. I am there to support you,” Modi said.

The scheme was announced by the prime minister in his Independence Day speech on August 15.

Since branchless banking in the form of business correspondents is to be further expanded, minimum remuneration of BCs has been fixed at Rs 5,000.

In the earlier campaign, there were no guidelines for remuneration of BCs but on an average, they were getting around Rs 2,000-Rs 3,000.

Image: Prime Minister Narendra Modi