By IANS,
New Delhi : The government Friday asked the banking companies to penetrate further the rural areas and provide access to finance to the poor and vulnerable sections of society.
Addressing the 15th general assembly organised by the World Savings Bank Institute (WSBI) here, Minister of State for Finance Pawan Kumar Bansal said the poor needed to be empowered.
“Banks are the driving force of the Indian economy. Once the poor is facilitated by banks, that would help them fight poverty and come to the economic mainstream,” he said.
Since 2006, banks are allowed to open new branches on the condition that at least half of such new branches should be opened in the rural and under-banked areas.
“Under the loan waiver and debt relief scheme, farmers will again become eligible for fresh agricultural loans. A large number of them are becoming members of self help groups (SHGs),” he pointed out.
The SHGs act as a link between the banks and the poor and also help them get financial services. As many as 2.92 million SHGs have been credit-linked with banks and have benefited over 40 million poor families.
The economy growth rate was nine percent in 2007-08 and the average growth rate for the last four years has been 8.9 percent.
According to Bansal, the government is looking at educating people about the complexities of the finance sector.
“No-frills or basic bank accounts are now on offer to every individual. These accounts provide minimum basic banking facilities to the account holders at low or minimum costs to banks. A good number of bank branches have reported 100 percent financial inclusion,” he said.