<p>The bank is confident that a nominal charge, which can be either a percentage of the amount transacted or a fixed amount, will not dissuade people from operating no-frills accounts, a senior SBI official involved in the state-run lender's financial inclusion initiative told PTI here on strict condition of anonymity.<br /><br />"The question on our minds is -- how do we make the operations of the model feasible? We can recover the Rs 20,000 required for setting up infrastructure in a village through a kiosk or palm-held device by opening around 100 accounts and charging Rs 200 as account-opening fees," the official said.<br /><br />Paying a small amount like Rs 3 for a transaction would be preferable to travelling 20 kilometres to reach a branch, he said, clarifying that the bank, however, has not finalised any plan yet.<br /><br />"You cannot have a model under which the financial inclusion roll-out is subsidised, it needs to be sustainable," he added.<br /><br />The bank has to take care of recurring expenses like maintaining back-end systems and paying the business correspondent (BC) operating on its behalf at the village level, he said. <br /><br />SBI plans to embark upon a massive public awareness campaign to heighten public interest in the financial inclusion initiative and assuage any concerns.<br /><br />However, when asked if such a move will face any regulatory hurdles, the official said, "Though the regulators have given us all the freedom, it is very difficult to say (what their reaction will be)."<br /><br />The financial inclusion initiative of the government involves establishing last-mile banking infrastructure at the village level to cover the entire population under the formal banking system.<br /><br />In his Budget speech this year, Finance Minister Pranab Mukherjee had said that all 60,000 unbanked villages in the country having a population of over 2,000 will be covered by the formal banking system by March, 2012.<br /><br />Subsequently, the unbanked villages were carved up between the various public sector banks for mandatory coverage.<br /><br />Considering the investment required on traditional brick -and-mortar branches, banks are outsourcing the operations to non-banking financial companies, appointing them as business correspondents (BC) to look after the operations.<br /><br /></p>
<p>The bank is confident that a nominal charge, which can be either a percentage of the amount transacted or a fixed amount, will not dissuade people from operating no-frills accounts, a senior SBI official involved in the state-run lender's financial inclusion initiative told PTI here on strict condition of anonymity.<br /><br />"The question on our minds is -- how do we make the operations of the model feasible? We can recover the Rs 20,000 required for setting up infrastructure in a village through a kiosk or palm-held device by opening around 100 accounts and charging Rs 200 as account-opening fees," the official said.<br /><br />Paying a small amount like Rs 3 for a transaction would be preferable to travelling 20 kilometres to reach a branch, he said, clarifying that the bank, however, has not finalised any plan yet.<br /><br />"You cannot have a model under which the financial inclusion roll-out is subsidised, it needs to be sustainable," he added.<br /><br />The bank has to take care of recurring expenses like maintaining back-end systems and paying the business correspondent (BC) operating on its behalf at the village level, he said. <br /><br />SBI plans to embark upon a massive public awareness campaign to heighten public interest in the financial inclusion initiative and assuage any concerns.<br /><br />However, when asked if such a move will face any regulatory hurdles, the official said, "Though the regulators have given us all the freedom, it is very difficult to say (what their reaction will be)."<br /><br />The financial inclusion initiative of the government involves establishing last-mile banking infrastructure at the village level to cover the entire population under the formal banking system.<br /><br />In his Budget speech this year, Finance Minister Pranab Mukherjee had said that all 60,000 unbanked villages in the country having a population of over 2,000 will be covered by the formal banking system by March, 2012.<br /><br />Subsequently, the unbanked villages were carved up between the various public sector banks for mandatory coverage.<br /><br />Considering the investment required on traditional brick -and-mortar branches, banks are outsourcing the operations to non-banking financial companies, appointing them as business correspondents (BC) to look after the operations.<br /><br /></p>