Govt set to roll out big financial inclusion plan on August 15

The plan is said to provide basic banking, insurance and pension facilities to 7.5 crore people in India, who do not have access to banking facilities

seema

Seema Sindhu | August 14, 2014



In an attempt to encourage banks to allow overdrafting (read loan or credit) for beneficiaries of the financial inclusion plan, prime minister Narendra Modi on August 15 is said to unveil a credit guarantee fund to compensate the banks in case of defaults

A senior official of the finance ministry told Governance Now that in accordance to the objections raised by banks in implementing the plan, it has decided to set up the credit guarantee fund. The sum total of the fund could not be verified as the fine print of the mission is yet to be finalised and would only be released on August 28.

As per the plan, it would provide basic banking, insurance and pension facilities to 7.5 crore people in India, who do not have access to banking facilities. While it targets to provide banking facilities in the first phase (ending on August 15, 2015) itself, pension and insurance would be provided in the second phase (ending in 2017). Initially, a part of the plan was to allow Rs 5,000 overdraft to every account holder. But in a meeting between top bank CEOs and the finance minister Arun Jaitley on July 31, the bank officials cited their concerns in implementing the overdraft saying that it could lead to defaults since the loans would be unsecured.

Bank officials said they would read the financial behaviour of the account holders and then take a call. Accordingly, the government has decided to set up the credit guarantee fund to assuage the banks fear and encourage them to lend between Rs 2,000 and Rs 5,000 in a span of six months of opening the account depending on the behaviour of the beneficiaries.

Along with this, the finance ministry says it would launch a big financial literacy plan on August 28 to educate the poor on the benefits of having an active bank account.

Comments

 

Other News

PSUs must be more disciplined: Anil Swarup

 Public sector undertakings (PSUs) can become more efficient only through discipline, said Anil Swarup, secretary, department of school education and literacy, ministry of human resource development. Speaking at the 2nd India PSU IT Forum organised by Governance Now on Wednesdaty, Swarup laid

Tejas Express: Not so tej

 Tejas Express, a semi-high speed train, is supposed to run at 200 kmph. But, on its inaugural run between Mumbai to Karmali (Goa), it touched a maximum speed of 110 kmph. A few days before it was flagged off by railway minister Suresh Prabhu on May 22, Indian Railways claimed that the train

NHRC notice to Jharkhand over abduction of 1,000 kids

The National Human Rights Commission has issued a notice to the Jharkhand government and sought a report over 1,000 children being reportedly abducted and recruited by Maoists over the past few years.   The commission cited a news article and said that it brings forth the sta

The walled city by moonlight

In 1998, as a 12-year-old, I was fascinated by the spectacle on display in the streets of Chandni Chowk, where I grew up, during the Chaudhvin Ka Chand festival, which recreated the Mugh

“In future, education will be either blended or fully online”

What restricts MOOCs’ acceptance despite having credits? It is just a matter of time. India has been used to the traditional way of education. However, the fact that India is the second biggest learner base for edX, after the United States, speaks volumes ab

Online learning is the way forward

Sameer Srivastava, a school topper from Meerut in Uttar Pradesh, wanted to study in an IIT like any other engineering aspirant. But getting into an institution where only less than one percent of the applicants are selected was a big hurdle. Not cutting the IIT mark, Sameer decided to settle for an



Video

प्रभुनाथ सिंह को हत्याकांड में उम्रकैद की सजा

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter