[QODLink]
Central & South Asia

Indian banks connect poor to services

Programme launched by Prime Minister Modi aims to curb corruption and extortion of borrowers by lenders.

Last updated: 28 Aug 2014 21:27
Email Article
Print Article
Share article
Send Feedback

India's state-owned banks are conducting a massive campaign to open millions of accounts for poor Indians who are off the financial grid and vulnerable to black market money lenders.

Prime Minister Narendra Modi officially launched the programme on Thursday, saying it would give the poor "renewed strength to fight poverty".

"When a bank account is opened, it's a step towards joining the economic mainstream," said Modi, who swept to power in May after an election campaign that promised an end to corruption, a revival in economic growth and a fairer society.

The programme may eventually help sideline extortionate money lenders or unscrupulous banks, some of which are blamed for driving tens of thousands of impoverished farmers to suicide each year over debts amounting to just a few thousand dollars.

Tens of thousands of people have applied to open accounts since August 15, when Modi announced the campaign in his Independence Day speech to the nation, bank managers said.

Modi had urged banks in a recent letter to "try your best to ensure that no one is left without a bank account." The goal is to sign up 150 million people by 2018. About half of India's 1.2 billion people lack bank accounts.

"There is an urgency to this exercise, as all other development activities are hindered by this single disability," Modi's letter said, according to his website.

The four-year programme may also help beat back the endemic corruption affecting almost every level of Indian bureaucracy, by channelling government welfare and work payments directly into the accounts of individuals rather than through regional and local offices.

The accounts are unique in that they would stay open without penalty if empty, a key condition for keeping enrolled the hundreds of millions of impoverished Indians earning about a dollar a day or less.

As an incentive, the federal government is providing Rs 100,000 ($1,650) in life insurance to every account holder.

Dozens of state banks with more than 100,000 branches countrywide are participating.

313

Source:
Al Jazeera and agencies
Email Article
Print Article
Share article
Send Feedback
Topics in this article
People
Country
Organisation
Featured on Al Jazeera
'Justice for All' demonstrations swell across the US over the deaths of African Americans in police encounters.
Six former Guantanamo detainees are now free in Uruguay with some hailing the decision to grant them asylum.
Disproportionately high number of Aboriginal people in prison highlights inequality and marginalisation, critics say.
Nearly half of Canadians have suffered inappropriate advances on the job - and the political arena is no exception.
Featured
Women's rights activists are demanding change after Hanna Lalango, 16, was gang-raped on a bus and left for dead.
Buried in Sweden's northern forest, Sorsele has welcomed many unaccompanied kids who help stabilise a town exodus.
A look at the changing face of North Korea, three years after the death of 'Dear Leader'.
While some fear a Muslim backlash after café killings, solidarity instead appears to be the order of the day.
Victims spared by the deadly disease are reporting blindness and other unexpected post-Ebola health issues.