There are 1,474 such gram panchayats where the outlets would come up by March 2019. But, with the rapid strides in the opening of banking outlets, the target may be met earlier than the schedule, feel officials with the Odisha government.
"We are enthused with the pace of establishment of banking outlets. This model is workable in Odisha where many interior villages lack telecom infrastructure. Moreover, banks
are wary of the cost factor in putting up brick and mortar branches. Most of the banking outlets have been set up by SBI (State Bank of India) but we hope other PSU banks
and even small finance banks
to follow", said a senior government official.
So far, 818 banking outlets have come up, with SBI taking the lead and setting up 478 outlets. The opening of outlets in the remaining 656 gram panchayats is in progress.
Odisha has 2,185 gram panchayats, which do not have a bank branch within a radius of five kilometers. Similarly, there are no business correspondents in 711 panchayats.
The state government is also nudging small finance
banks to go for banking outlets in inaccessible areas.
Suryodaya Small Finance Bank, headquartered in Navi Mumbai, and Ujjivan Small Finance Bank have started their operations in Bhubaneswar in November 2017.
While Ujjivan SFB (small finance bank) has plans to open three branches in unbanked gram panchayats by March 2018, Suryodaya has decided to open 16 new branches in the unbanked panchayats in the near future.
"This is in addition to the conversion of their existing MFI branches to SFB branches. The SFBs are heralded as agents of change with their emphasis on small ticket loans", sources said.
Jana Small Finance Bank is also planning to start its services in Odisha shortly.
The small finance banks shall primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganized sector entities. There is no restriction in the area of operations of small finance banks.
In June this year, the Reserve Bank of India (RBI), Bhubaneswar along with the Odisha government had impressed upon the payment banks and small finance banks to extend their banking network to the unbanked areas of the state.