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 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.
The Narendra Modi government has set aside Rs 52,393 crore in 2017-18 for the welfare of the dalits. On the face of it, the amount is substantial. However, an analysis of the past actual allocation shows that there has in fact been a dip in spending on schemes that are specifically meant only for dalits.
“I will always try and it is also my belief that the president’s post should be above politics,” said NDA’s presidential candidate Ram Nath Kovind who filed the nomination papers on Friday. “Since the time I became governor, I am no longe
A lot of debate that we witness in the media on the cattle question these days suffer from the disease of speculative utopian imagination of a ‘cow-nation’ and relentless abuses for those beef-eating ‘others’. Political debates over the question of o
Ramin Jahanbegloo is a renowned philosopher who is now associated with the Jindal Global University. His latest work, The Decline of Civilization, calls for countering the ‘decivilising’ tendencies of our times by returning to Gandhi and Tagore. Jahanbegloo answered s
Should CBSE prepone the board exams?
In this nationalistic age, sports seem to play an important role, and in India, this can be seen during cricket matches. For most, a victory symbolises prestige and supremacy. On Sunday, India lost to Pakistan in the final match of the ICC Champions Trophy. The defea