Financial Daily from THE HINDU group of publications
Thursday, Dec 29, 2005
Financial Daily from THE HINDU group of publications Thursday, Dec 29, 2005 |
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Money & Banking
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Regional Rural Banks Industry & Economy - Rural Development To take banking to rural areas — RBI asks RRBs to offer credit cards, no frills account Our Bureau
Mumbai , Dec. 28 CUSTOMERS in rural and semi-urban areas would soon be able to access banking services such as `no frills' accounts and credit cards. The Reserve Bank of India has asked Regional Rural Banks (RRBs) to offer these facilities as a measure aimed at taking banking services to the common man. The procedure for opening the `no frills' account would be simple and they would overdraft facility. In order for RRBs to deliver credit in rural areas, they would be permitted to avail lines of credit from sponsor banks at reasonable rates of interest, access inter-RRB term money or borrowings and repo or CBLO markets, said the release from RBI. RRBs can also set up ATMs, issue debit and credit cards and also handle pension. The general credit cards issued by RRBs would operate like Kisan credit card. The card can be used for withdrawing cash against the limit sanctioned. Fifty per cent of the outstanding amount would be treated as indirect finance to agriculture. Women will be given preferential treatment under this scheme. Commercial banks and RRBs have been asked to tie up with local post offices, schools, primary health centres, local Government functionaries, farmers' associations or clubs, and so on, for issuing general credit cards. RBI has also announced a one-time settlement (OTS) for small borrowers to settle their non-performing accounts with banks. All commercial banks, including RRBs and local area banks, have been asked to provide a simple mechanism for OTS of loans up to Rs 25,000, which have become losses as on September 30.
More Stories on : Regional Rural Banks | Rural Development
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