Ensure one a/c per family, Finance Ministry to banks

Mumbai: In an ambitious move, the Finance Ministry has asked banks to ensure that at least one person per family across the country has a bank account in the next six months.

As per the 2011 census, only three in five families have a bank account in the country, or 40 per cent of the families are not in the banking system, a senior Finance Ministry official said.

"During the meeting between Finance Minister (Pranab Mukherjee) and heads of public sector banks on June 12 it was decided to ensure that there is a bank account in every family in the next six months," Additional Secretary in the department of financial services, Sunil Soni said.

He said a bank account for every family will help the government and its agencies to use it for electronic fund transfer of wages, salaries or payments to suppliers.

"All the payments from the government will be done electronically directly into the account to reduce leakage," he said.

He said the decision, coupled with a recent move to make all electronic fund transfers under Rs 1 lakh through the NEFT, will make it possible for cheap movement of funds.

Banks can easily achieve the target, given the success they have achieved in financial inclusion programme, wherein over 73,000 villages having a population of above 2,000 were covered with a bank presence within two years, Soni said.

Internet-based technology and right approach will make it possible for banks to achieve the target, he said. Soni also suggested that every such account holder will have to be compulsory given an ATM (automated teller machine) card which will give him an ease of access.

Plans are also on to link such accounts with instruments like the Kisan Credit Card which will integrate an individual's financial dealings, he said.

Earlier, in its financial inclusion drive had asked all commercial banks to follow business correspondent model in order to provide banking services in village with population of above 2,000 people.

Till March 2012, banks had covered more than 73,000 villages as per the financial inclusion objective set by the government.

Life insurance giant LIC's Chairman DK Malhotra also noted that the corporation is targeting to provide insurance to every "insurable" individual in the country by 2020.

LIC has 350 million policyholders currently, he said.