Even before the inception of Prime Minister’s Jan Dhan Yojana, Kerala had already started working towards centper- cent financial inclusion in the state, so that every household has at least one bank account, K R Balachandran says in an interaction with Nayana Singh and Kartik Sharma of ENN
In the backdrop of PM’s Jan Dhan Yojana, what steps Kerala has initiated to make financial inclusion all-pervasive?
As far as Kerala is concerned, Canara Bank is State Level Banker’s Committee (SLBC) convenor. We have the responsibility of coordinating the entire work of implementing Prime Minister’s Jan Dhan Yojana in the state along with coordinating the activities of all the banks with the support from the state government.
CRISIL Inclusix, India’s first comprehensive financial inclusion index is based on data provided by RBI and measures the progress of financial inclusions across the country, covering all the 638 districts. At 42.8 on a scale of 100, the all-India Inclusix score reflects underpenetration of formal banking in the country. The research also showed that just one in two Indians have a savings account and one in seven has access to bank credit.
Wide disparities in access to financial services were witnessed as India’s six largest cities have 10 percent of India’s bank branches, while the rest have merely two percent of the bank branches. Smaller states and union territories perform better than larger states; Puducherry continues to remain number one followed by Chandigarh and Goa. Among the districts, Pathanamthitta in Kerala has the highest CRISIL Inclusix score followed by Karaikal in Puducherry.
Coming to PMJDY, I want to emphasise that financial inclusion in Kerala existed before the formal launch of this programme. In 2011, there were campaigns which were aimed at providing some kind of banking facility in villages. During that time, we found out that in Kerala there were approximately 77 lakh households. Out of this, 47 percent households were in urban and remaining 53 percent were in rural areas.
Out of 77 lakh, 57 lakh had access to banking facilities, and that means near about 20 lakh households were left out. Later, we had online family account campaign in all the 14 districts and then came direct benefit transfer for enabling the different subsidies and scholarships. There was another campaign for Aadhaar enrolment which again was directed to open an account.
With all these campaigns which were undertaken subsequent to 2011, we achieved 95 percent banking penetration in Kerala. Thus, today, from the 20 lakh households, only one lakh households are left.
We also opened a toll-free number which is functioning from our office located in Bangalore. Any customer calling on that number would have his grievances addressed. This number is for customers in Kerala and the call is attended by trained people sitting in Bangalore who are well versed with Malayalam. We have launched another number that is for nationwide use. Apart from the numbers we have also launched the website, www.pmjdy.gov.in wherein customers can have access to any information pertaining to the PMJDY programme.
“We have already attained our aim to open at least one bank account per household. Earlier, the scheme aimed at opening two accounts per household out of which one account must be of a female member of the family. This will be implemented in the days ahead.”
Kerala has higher urban population compared to other states. What challenges did you face while involving the urban segment in financial inclusion?
During 2011, when we were surveying, we met different bank officials to determine how many households were still left. We took that report and again resurveyed the area and included those which were not covered before.
Then, we needed to segregate those houses which had recently come up in order to achieve 100 percent results. We went to panchayat offices and collected the data about the new households that have come up. Later, banks were instructed to recollect this data, cover these households and open the new bank accounts. That is how we have successfully achieved 100 percent survey rate.
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This task was not undertaken in urban areas. We found out that account opening in urban areas is not a problem as almost every household had a bank account. So, we were able to complete the process earlier than originally expected.
How does IT help you in reaching out to the people?
We have conducted about 2000 IT sensitisation camps to make people aware about the financial inclusion initiative. Similarly, the Akshaya Centres are functional in Kerala. They are proficient in handling IT and they also have robust network. Every Panchayat, on an average, has two Akshaya Centres.
Now, next issue is to extend the last mile connectivity. In Kerala, major banks like State Bank of India and others are tied up with Akshaya Centres to provide the basic services like opening of a bank account and executing other transactions.
We are trying to achieve perfection in providing infrastructure to Akshaya Centres but that will take some time. We are also taking up the strengthening of this process with our banks and we are seeing whether some other services can be added in Akshaya Centres.
We have a Swavalamban scheme which is a national pension scheme for unorganised sector. Thus, we have to see whether the Akshaya centre can be authorised and empowered to enrol for Swavalamban scheme and other benefits. We are also focussed towards to find out how these Akshaya Centres can be motivated to continue.
“Wide disparities in access to financial services were witnessed as India’s six largest cities have 10 percent of India’s bank branches, while the rest have merely two per cent of the bank branches.”
What is your vision of financial inclusion in Kerala?
In Kerala, you cannot have a rural and urban divide. Kerala is different. Communication is good here, people are literate and thus majority of people in Kerala are aware of the banking systems and benefits. But same cannot be expected in rural areas of other states, as people will not be aware of the schemes and benefits.
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We feel that there are certain milestones that we have achieved and some we have to attain in coming days. In phase one there are four pillars to be achieved. This means that you need to have a universal banking, financial literacy, open a basic saving account with a RuPay debit card and have some kind of guarantee cover for the credit limit that can be extended by the bank.
We have already attained our aim to open at least one bank account per household. Earlier, the scheme was determined towards opening two accounts per household out of which one account must be of a female member of the family. This will be implemented in days to come but as far as Kerala is concerned, the second account opening has been started.
During this campaign till now 11.85 lakh accounts have been opened. So, most of the households have more than one account. We need to strengthen the functioning of the system and thus make it more robust. In Kerala we will be able to achieve these pillars one by one much ahead of many other states in the country.
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