Axis Bank, India’s third-largest private bank has begun implementing it’s rural expansion plans and intends to cover 5,500 villages for financial inclusion by March 2011 and scale it up to 12,000 villages in five years’ time.
The bank has kick-started its financial inclusion initiative in villages located near Nashik in the state of Maharashtra and Darjeeling in West Bengal . Financial inclusion consists of providing banking services at affordable costs to weaker sections of society or the unbanked segment, which does not have any access to the formal banking system.The RBI and Government of India have made it mandatory for private sector banks to implement a financial inclusion plans.
Currently financial inclusion experts believe that an estimated 60% of the Indian population does not have access to formal banking facility. Axis Bank is looking at opening atleast 18 Lakh no frills banking accounts and raise Rs 40 crore of deposits and give Rs 10 crore of advances through its financial inclusion initiative.Speaking to media, Mr SK Chakrabarti, executive director Axis bank’s retail banking division said that the bank is looking at several low cost delivery models such as the use of smart card, mobile banking and point of transaction devices. Axis Bank has also set up separate financial inclusion team to implement it’s financial inclusion roadmap.
It may be recalled that Reserve Bank of India had asked all private and public sector banks to chart a road map on financial inclusion.The plan was expected to cover issues like the number of branches that banks would plan to open in rural India, the number of no-frill accounts they plan and the number of business correspondents they would appoint to achieve their financial inclusion target.