Two districts in Kerala are striving hard to bag a rare honour from the Reserve Bank of India [Get Quote]. The districts of Palakkad and Malappuram will soon become the first districts in India where every household will have a bank account.

By September-end, the nearly 500,000 families in Palakkad and the 600,000 odd families in Malappuram will boast of having a bank account. Palakkad and Malappuram have a population of 26 lakh (2.6 million) and 30 lakh (3 million), respectively.

This unique achievement by these districts comes in the wake of two other national honours Palakkad and Malappuram have bagged in the last two years.

Two years ago, Muslim-dominated Malappuram district was declared as India's first e-literate and technology savvy district after a state government-led computer literacy programme offered 15-hour PC and Internet training to one member from each of the 600,000-odd families in the district.

Similarly, Palakkad became India's first IT-enabled district headquarters last year after the Collectorate successfully integrated a suite of Web-enabled applications for administrative functions.

Now the drive in two districts to become the first total banking districts in the country has excited bankers, officials and ministers.

"It is exciting that two districts in Kerala would become India's first districts with households all of whom have bank accounts. It is a great honour," Kerala's Revenue Minister K P Rajendran told rediff.com.

He says the initiative in this regard was taken by the State Level Bankers' Committee. The committee took up the programme to ensure bank accounts for every household in the districts in the wake of a Reserve Bank of India policy statement for 2005-06.

The statement had asked SLBC conveners in all states across the country to identify at least one district in their area for achieving 100 per cent financial inclusion by providing 'no frills' account and a General Purpose Credit Card for extending need-based loan facilities.

Six months back, the SLBC in Kerala launched an action plan to implement total banking solutions in Malappuram and Palakkad before September 30 this year.

As per the action plan, surveys were conducted to identify families that did not have bank accounts. Following the survey's results, various bank branches were allocated areas in the districts to meet the target families.

Then, commercial and cooperative banks launched campaigns in collaboration with local panchayat leaders to open 'no frills' bank accounts by the people to inculcate banking habits in them.

"Some families who are very poor refused to open bank accounts. They asked 'what is the point of having bank accounts without money.' But we have convinced most of them that a bank account helps to get loans, agricultural credits and to promote saving habits," K A Gopalakrishnan, a panchayat member in Palakkad's Anakkara Panchayat told rediff.com.

In Palakkad, Canara Bank [Get Quote] has been the lead bank that has been carrying out the most successful campaign to open bank accounts for all the families. In the process, the bank roped in agriculture, revenue and panchayat departments and the State Poverty Eradication Mission to implement the scheme.

Other banks that have joined hands for the unique project are Federal Bank [Get Quote], Punjab National Bank [Get Quote], State Bank of Travancore [Get Quote], South Indian Bank [Get Quote], Catholic Syrian Bank and a number of cooperative banks.

Officials say one reason why the project to open bank accounts for every family is succeeding in Kerala is because of the high deposits from Non-Resident Indians in commercial banks.

North Malabar Grameen Bank officer P K Damodaran says almost every family in Malappuram has someone working in the Persian Gulf region. "So it is natural that every family wants to open a bank account. With our push, it is easy to convince everyone on the need to have a bank account," he said.

According to the latest review of the State Level Bankers Committee, NRI deposits in Kerala stood at Rs 29,641 crore (Rs 296.41 billion), an increase of Rs. 822 crore (Rs billion) from the Rs 28,819 crore (Rs 288.19 billion) registered on September 30, 2005.

Non-resident deposits in the state constitute 40.67 per cent of the total bank deposits in Kerala. The state has 3,554 commercial bank branches. Of these, 2,410 are public sector banks.

Revenue Minister Rajendran says after the successful completion of the total banking districts project in Malappuram and Palakkad, the initiative will be taken up in all the other 12 districts.

If the plan goes well, the government hopes all the families in Kerala will have bank accounts by March 2008.