18,000 people of 9 islands now under financial inclusion
Kadamakkudy panchayat, a cluster of 9 islands in Ernakulam district, will have its first full- fledged bank branch from Monday. The new branch of Union Bank of India, the lead bank of the district, is being opened at Pizhala in the panchayat on March 31, the last day of the financial year. The branch will have an ATM too.
Ernakulam district was declared fully banked in November, 2012, when Kadamakkudy, with a population of 18,000, was the only panchayat without any bank branch. The Hindu had reported it on the eve of the declaration by the RBI Governor.
The banking facility at Kadamakkudy was provided through the Business Correspondent model of the RBI. Accordingly, limited amenities such as investments were being carried out through a person engaged by the Union Bank of India. Absence of an ATM and difficulties in cheque-based transactions had rendered the service unattractive to customers in general.
The declaration as a totally banked district was made by the RBI Governor on the basis of surveys and an intensive campaign undertaken by various banks under the district lead bank scheme. The tag ‘fully banked’ tag is given to those districts with a minimum of 90 per cent of the people having accounts with any bank, according to officials of the lead bank.
The ‘fully banked district’ scheme was an offshoot of the policy decision taken by the Union government, based on an announcement on financial inclusion, made by Union Finance Minister in the 2010-11 budget speech. The idea was to provide banking facilities to all habitations with a population of 2,000 or more. Over 70,000 habitations have been identified under the programme all across the country.
Kadamakkudy residents had been making use of the services of Korampadam Service Cooperative Bank, but the service cooperative banks do not qualify for the nomenclature of a bank as per RBI guidelines, banking officials said.
The service cooperative banks are not authorised to issue MICR compliant cheques. MICR cheques enable speedy transaction in the banking channels and non-MICR cheques are being phased out.
The district has 904 branches of various banks in the public and private sectors now, including the district cooperative bank.