Odisha becomes the first state to bring banking to remote areas

Odisha on 27 March 2017 became the first state in the country to carry financial inclusion and extend banking services to remote rural areas through Self Help Groups (SHGs).  

The state’s government has signed an agreement with the State Bank of India for the same.

Key Highlights

• The entire process would be carried out in phases, the first of which would include SHGs engaging as Banking Correspondents in around 1000 remote Gram Panchayats that have no access to banking facilities.

• Slowly, it would then be extended to 4000 unbanked panchayats.

• It would later be extended across the state as a supplement to banking service

• The arrangement would be of great help to people living in rural areas that fall under social security schemes like the Pradhan Mantri Bima Surakshya Yojana, Pradhan Mantri Jeevan Jyoti Yojana and Atal Pension Yojana.

• It would also help people get access to services like opening of bank accounts, depositing and withdrawal of cash, use of Rupay Cards, Aadhaar-enabled payments and other banking facilities.

• It would also help promote digital banking.

Speaking on the development, Rajnish Kumar, Managing Director of the National Banking Group of the State Bank of India stated that Odisha is a pioneer state in carrying forward financial inclusion through close cooperation between SHGs and banks and added that such collaborations would have great positive impact on Aadhaar seeding of bank accounts.

Further, the state’s Chief Secretary A P Padhi said that almost 70 per cent of the Gram Panchayats in Odisha do not have brick and mortar bank branches and taking banking services to people living in these remote areas has always been a cause of concern for the government.

He added that financial inclusion does not just mean the opening of bank accounts but also meeting the credit needs of the people to enhance their livelihood and income.