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— Ramesh Sharma

The Finance Minister, Mr P. Chidambaram, and the Chairman and Managing Director of Punjab National Bank, Mr K. C. Chakrabarty (left), at the inauguration of the bank’s first micro finance branch with ATM at Mukundpur, in New Delhi on Wednesday.

Our Bureau

New Delhi, May 14 The Finance Minister, Mr P. Chidambaram, on Wednesday called on every domestic household to go in for a bank account and advised families to develop the habit of banking to avoid falling prey to moneylenders.

Inaugurating Punjab National Bank’s first dedicated micro finance branch in the country at Mukundpur in Delhi, Mr Chidambaram said that today banks give loans for everything — for business, trade, self-employment, medical and education purposes. He also admitted that public sector banks need to expand their branch network and reach every household.

“Indira Gandhi nationalised the banks so that banking can go to the very poor. Banking cannot go to the very poor unless we open more branches. We should take advantage of technology. That is precisely what the UPA Government is doing,” he said.

Reeling out statistics on the extent of coverage of banks, Mr Chidambaram said that only 7 per cent of India’s villages have a bank.

“If you look at the kind of coverage we have, it somewhat frightens me. About 81 per cent of the country’s villages do not have a bank within a distance of 2 km… 41 per cent of the country’s population does not have a bank account. Credit is available only to 10 per cent in rural areas and 14 per cent in urban areas,” he said.

Mukundpur, which has population of 2 lakh people, was an un-banked area in Delhi. At PNB’s micro-finance branch, with an ATM, more than 12,000 no-frill accounts have now been opened.

Mr Chidambaram said that the inauguration of the micro-finance branch was a great beginning.

“Today, we only make a beginning. There is much to be done. Only 150 SHGs have been enrolled. It is not enough to stop with 150. We must get at least 1000 mahila SHGs enrolled,” he said.

He said that it was UPA Government that had taken “financial inclusion” in a big way. “Four years ago, nobody spoke about financial inclusion. It is only in the last four years we are talking about financial inclusion. We are asking banks to open branches. We are asking banks to use technology to take banking to every part of India,” Mr Chidambaram said.

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