RBI implements IT-enabled financial inclusion project in Karnataka

The Reserve Bank of India (RBI) is actively implementing IT-enabled financial inclusion project in Karnataka. Under this scheme bank accounts will be opened and smart cards will be issued through these and business correspondents all the government payments will easily be routed to the beneficiaries of public projects like National Rural Employment Guarantee Project (NREGP) in Karnataka.

Devaki Muthukrishnan, regional director, RBI, said a pilot project is being launched to carry out the project in three districts of Bellary, Chitradurga and Gulbarga. "We are in the advanced stages of finalizing the pilot with the lead banks concerned and government of Karnataka. The project will be launched very soon," she said.

Speaking at a one-day workshop on the role and responsibilities of non-government organizations as business facilitators and business correspondents, held in Karnataka, she informed that the first phase of financial inclusion taken up by banking community has successfully completed, during this ‘no frills' accounts were opened for every household in all 29 districts.

In the Bangalore Metro work of opening of accounts has been completed. During the first phase of financial inclusion in the state about 3 million bank accounts were opened.

"The banks need to redesign their business strategies to incorporate specific plans to promote financial inclusion of "bottom of the pyramid" group treating it both as a business opportunity as well as a corporate social responsibility. They have to make use of information technology-based solutions like smart cards extensively to facilitate offsite banking," she said.

Muthukrishnan told banks should use business correspondents and business facilitators' models for increasing the capacities of existing branches to increase their outreach with proper care. They are required to repeat the model of micro-credit delivery to farmers and artisans through NGOs, self help groups and farmers' clubs selectively.

"Financial inclusion can emerge as a commercially profitable business and can lift the financial condition and standards of life of the poor and the disadvantaged. The bankers, technology providers, NGOs, micro-finance institutions have a small but significant role to play in this unfolding of future story of economic growth and distribution and we shall strive to achieve the set goals," she added.

At the workshop organized by Initiatives for Development Foundation, N K Thingalaya, former chairman of Syndicate Bank, Mahpara Ali, Chief General Manager, State Bank of India were also present on the occasion.