Even after 65 years of independence 65 percent of the country’s population has remained unbanked, says Amitabh Verma, commissioner, general administration of Bihar government.

What it meant is that the formal structure of banking has not delivered. So there is a need to look at the alternatives. Although the business correspondent (BC) model has been taken up with enthusiasm in recent times, it has its shortcomings. Those employed as BCs often do not have adequate training. 

Verma was speaking at a panel discussion on ‘Financial Inclusion: will a good mission meet a good market?’ as part of a conference organized by Governance Now on ‘Bihar: Banking on Inclusion’ in Patna on Saturday.

S Sidhartha, secretary to chief minister Nitish Kumar, highlighted Bihar’s failure on the financial inclusion front. Speaking about the huge gap between the demand and supply in the banking sector he said out of total 38 districts in Bihar 36 districts remained unbanked. Again as compared to 14,000 people per bank in India, Bihar had one bank for 21,000 population, and the credit deposit ratio for the state stood at 34 percent as against 77 percent at the national level.

“People’s aspirations have risen, their demands have changed. Now more and more people want a bank account,” he said. The way out, he said, was to expand the business correspondent model that takes banking at the door step of the people. Another step in the direction could be encouraging the formation of self-help groups (SHG).   

AS Shekhawat, chairman of Bihar Kshetriya Gramin Bank, emphasised the need for financial literacy for a meaningful financial inclusion. It was important to inform people about the benefits of banking and help them develop saving habits. He also talked about the microfinance scenario in the country.

RB Gupta, general manager of Central Bank of India, said the concept of financial inclusion would click if done in a systemic manner. Opening bank accounts was not financial inclusion, there should also be provisions to lend credits to people. “It is important that we impart training to the employees of the banks hired for the purpose. Every bank should open training centres in their branches,” he said.

Irfan Alam, founder of Sammaan, an organisation involved in manufacturing and financing, said financial inclusion had not worked till now because it had not been taken seriously. “For it to work, the heart has to be in the right place,” he said. Citing the example of ATMs, he said these very machines were thought of as useless, however today one could not do without them. Similarly financial inclusion would be appreciated and reckoned for sure few years later.