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Indian PM Modi seeks universal access to banking

Prime Minister Modi's initiative seeks to give all citizens access to banks.
By Ed Adamczyk Follow @adamczyk_ed Contact the Author   |   Aug. 28, 2014 at 1:45 PM
NEW DELHI, Aug. 28 (UPI) -- India's government began a campaign to take banking to the poor Thursday, aiming for 75 million households to have bank accounts by 2018.

Prime Minister Narendra Modi told state and private banks to support the initiative. Nearly 40 percent of Indians have little or no access to formal financial institutions and often patronize money lenders who charge excessive rates of interest.

At the official launch ceremony Thursday, Modi said the plan would offer "renewed strength to fight poverty. When a bank account is opened, it's a step towards joining the economic mainstream."

Each bank customer will receive a debit card, overdraft protection and accident insurance. Modi first announced the plan in August, after his May election. At the time he said, "There are millions of families who have mobile phones but no bank accounts. We have to change this scenario," adding there was "urgency to this exercise as all other development activities are hindered by this single disability."

An impediment could be the lack of identity documentation of India's poor. Many do not have birth certificates, proof of address or other requirements to open an account.

"For the common man, the opening of a bank account is a Herculean task," said N.S.N. Reddy, chief manager of the state-run Andhra Bank.

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