The standing committee of the Eastern Zonal Council, a committee under the Union home ministry that met recently to discuss issues of eastern states, has requested the Centre to direct nationalised banks to set up more brick-and-mortar branches in unbanked rural areas of Bengal.
According to the report of the committee that held a meeting in April last week in Calcutta, 451 gram panchayats out of 3,351 in Bengal do not have any brick-and-mortar bank within a radius of 5km.
The eastern zonal council had earlier decided in its 24th meeting held on August 22, 2019 in Bhubaneswar, Odisha, that a bank branch or India Post Payments Bank should be within 5km and 10 km, respectively, of villages. Hence, the council has taken up the initiative to set up bank branches in unbanked rural areas.
“The committee pointed out that the state government had taken several initiatives to set up bank branches in the unbanked areas by offering space at an annual rent of Rs 1 in the panchayat offices and Krishak Bazars. As banks did not come forward despite the offer and a good number of gram panchayats still remain unbanked, the committee has asked the Centre to come forward and instruct the banks to open their branches in the unbanked areas,” said a senior government official.
“I don’t know whether the situation would improve even if the Centre passes instructions, but it has become clear that the state has made its effort and now the Centre has to act,” the official added.
Sources said that the council is stressing on covering all unbanked villages as both state and Centre-run welfare schemes where funds are directly transferred to the bank accounts of beneficiaries.
“A bank branch or India Post Payments Bank should be within 5km/10km of a village so that beneficiaries of various social sector schemes in rural areas do not suffer in getting their payments,” reads the agenda note of the standing committee held recently in Calcutta.
The committee also pointed out that more bank branches are needed in Bengal as on an average 12,821 rural people are being served by a single bank branch in the state.
“This is very high in comparison to the national average of less than 10,000 people per rural branch,” the report of the standing committee reads.
The committee said in its report that all the villages in Bengal were covered through banking outlets like banking correspondents or customer service points (CSPs).
“Though it is reported that these banking outlets are fully compliant to the RBI guidelines, a large chunk of these banking outlets are not. So, until brick-and-mortar banks are set up in the rural areas, proper banking services can’t be provided to rural people,” said a senior government official.