OPINION: Bank accounts for all won’t bring financial inclusion to India
Wednesday, July 9, 2014
Financial inclusion, the buzzword that Manmohan Singh government used quite freely during his term in office, is likely to be part of Prime Minister Narendra Modi’s lexicon as well. But the question is, how will he implement it?
According to knowledgeable government sources, it will be through a project of doling out bank accounts to the unbanked and poor of India. And the slogan will be “one bank account for every Indian household within a year”.
This decision is likely to be included either in the budget speech of Arun Jaitley or in Modi’s Independence Day speech.
For a government that has shown a flair for fancy announcements, this is an ideal proposition – every Indian household, particularly the 40 per cent who have never visited a bank, holding a bank account. Do they intend to do any banking with this account? Do they have any money to transact through the banks? Or will it in any way improve credit facilities? Who knows?
This is a problem with a new prime minister who is eager for impact and bureaucratic solutions that feed such eagerness. Apparently this top-down solution came from finance ministry officials and the prime minister likes it. It’s still in the planning stages and hence the detailed contours are not available.