Bihar deputy chief minister Sushil Kumar Modi has appealed to the banking institutions to convert their delivery mechanism for the financial inclusion programme into a successful business model so that it is sustainable and benefits the poor. He said though banks have opened no-frills accounts in large numbers, there has been very little business.

“Unless loans are given and there are (monetary) transactions, these accounts are meaningless, dead. So, the banks need to accept deposits, give small credits to the poor and allow remittances. I appeal to the banks to fill these gaps and overcome the shortcomings for the inclusion programme to succeed,” he said in his inaugural address at the conference, “Bihar: Banking on Inclusion”, organised by Governance Now, along with the department of planning and development, government of Bihar, and Asian Development Research Institute (ADRI), in Patna on Saturday.

Modi said Bihar was a poor state and one of the most unbanked ones in the country. It badly needs financial inclusion. There are 4,882 bank branches in the state, of which only 2,750 are located in rural areas. There is a “hunger” for more banks, especially in rural areas, he noted.

“We have brought about some amount of social empowerment and now need financial empowerment. For this, we need bank accounts,” he said.

The deputy CM said he was looking forward to the opening of about 14,000 new banking outlets in a year's time as per the central government’s directive under its financial inclusion programme.

But the mere appointment of business correspondents (BCs) is not enough, he said. Most BCs  are generating a paltry sum of Rs 2,000-3,000 a month. As a result, the attrition rate of BCs is very high. "They should get at least Rs 5,000 a month  Generating adequate business for them is the real challenge for the banks," the deputy chief minister said.

He exhorted senior executives of nationalised banks participating in the conference to change their delivery mechanism for which technology existed. He drew the attention to multiplicity of cards—debit and credit cards, smart cards, Rashtriya Swasthya Bima Yojana cards and the likes—and urged the banks to use technology to come up with a singles card to “converge” the multiple functions.

Modi assured the banks that there would be no transaction problem in Bihar. He said the state gave scholarship to 1.5 crore students belonging to the underprivileged sections of the society, up to Rs 2,400 a year. There were several government schemes in which cash was given directly to the beneficiaries. All of these exceeded Rs 10,000 crore a year. These transactions could be channelised though banks.