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Our Bureau

In talks with States for replicating Himachal model

GLOBAL CARD: (from left) Mr Shantanu Mukherjee, Country Manager, Visa International; Mr V. Leeladhar, Deputy Governor, Reserve Bank of India; and Mr B. Sambamurthy, Chairman and Managing Director, Corporation Bank, at the launch of `CorpBank International Credit Card' in Bangalore on Monday. — G.R.N. Somashekar

Bangalore May 21 The Reserve Bank of India has sought state governments' intervention for accelerating the financial inclusion programme in the country.

Speaking at the launch of the Corporation's Bank International Credit Card, the RBI's Deputy Governor, Mr V. Leeladhar, cautioned bankers, "The consequences would be financial exclusion. Financial exclusion will lead to social exclusion."

He said the efforts of the Himachal Pradesh Government in attaining full financial inclusion was commendable. It is the only State in the country to achieve full financial inclusion. The RBI, he said, was discussing with the state governments of Uttaranchal, Goa and Chhattisgarh for replicating the HP model of financial inclusion.

Low coverage

He said the low level of banking coverage in the country necessitated inclusion. Only about 59 per cent of the country's population has bank accounts. This figure is far lower than even some of the developing countries.

Kerala, where about 89 per cent of the population has bank accounts, has high coverage. On the other hand, the North East and backward eastern States have a low coverage with just 21 per cent.

Mr Leeladhar said the RBI had deliberately chosen the British model of financial inclusion. It is entirely a voluntary effort by the banking sector. The alternative model is the one adopted by the US Government, where a bank account is a statutory obligation.

However, the Deputy Governor emphasised that mere opening of a bank account alone was not enough. "Bankers should offer all financial services to those who open accounts."

This, he said, would help wean rural India away from the unorganised credit sector that charges high rates of interest.

Another of the RBI's projects involves improving the financial literacy in the country. For this purpose, the bank has tied up with the Andhra Pradesh Government as a test case.

The Andhra Pradesh Government has offered to print the literature for the purpose and distribute the same in the State.

The central bank is also planning to start closely monitoring compliance to the codes and standards in banking, in view of mounting customer complaints.

Earlier, the Chairman and Managing Director of Corporation Bank, Mr B. Sambamurthy, said the back-end partner for the credit card operations was Venture Infotek Global.

Fully transparent

He said unlike most credit cards, Corporation Bank's International Credit Card would be fully transparent. As a security measure, the cardholder's photograph would be affixed on the card along with a digitally imprinted signature. The bank hopes to sell at least one-lakh cards over the next two months.

The card is co-branded along with Visa International and would be accepted at 21 million outlets in the world including 1.1 million in India.

Mr Santanu Mukerjee, Country Manager for Visa International, said Visa till March-end this year had issued 53 million cards of which 38 million were debit cards.

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