“As on March 31, 2017, 96 percent (472,136 villages) of the total villages allotted had been covered comprising of 19,875 villages through brick and mortar branches, 431,359 villages through BCs (banking correspondents) and 20,902 villages through other modes,” said the RBI.

 

The report said that the Reserve Bank had taken several steps to provide banking facilities in all the unbanked villages in the country.

 

A roadmap to cover villages with population more than 2,000 was first rolled out in 2010. A total of 74,414 villages with population more than 2,000 were identified and allotted to various banks (public sector banks, private sector banks and regional rural banks) through State Level Bankers’ Committees (SLBCs) for coverage. All the identified villages have been provided banking services through branches or business correspondents or through other modes such as ATMs and mobile vans.

 

In June 2012, a roadmap was rolled out to provide banking services to unbanked villages with population less than 2,000. A total of 491,825 unbanked villages across the country with a population of less than 2,000 were allotted to various banks through SLBCs for coverage.

 

The report went on to say that “as integrity and consistency of data are crucial for framing policy and designing strategies, an Automated Data Extraction Project from banks to the Reserve Bank and a portal to capture data relating to natural calamities will be implemented to strengthen the existing processes for information and data collection from banks on a real time basis”.

 

It said that the role of the Reserve Bank in the area of financial inclusion involves developing policies towards ensuring the availability of banking services at affordable costs for those vulnerable sections of society who have hitherto been left outside the scope of formal financial services due to factors such as illiteracy, lack of banking infrastructure, difficulty in physical access to such services in far flung areas and perceived lack of creditworthiness

 

Read: RBI Deputy Governor, SS Mundra on financial inclusion 

 

Strengthening the Banking Correspondent (BC) model has been one of the important development agendas, recognising the significant role played by BCs in providing last mile financial services in the underbanked and unbanked regions of the country. Having a BC registry and certification process in place would go a long way in strengthening the BC model.

 

“A BC registry is proposed to be structured as a database of comprehensive information pertaining to the existing or potential business correspondents. The BC registry will give a holistic view of under-banked and less penetrated areas in a region and accordingly the delivery of financial services can be improved in such areas through appropriate policy interventions. It will help in effective monitoring and oversight of BC operations. It is expected that banks and the regulators would utilise this database to gather critical insights and frame policies accordingly for strengthening the BC infrastructure. The Reserve Bank has developed the framework for the BC registry and IBA is in the process of setting up the online registry portal,” the RBI report added.