By Bizodisha Bureau, Bhubaneswar, August 22, 2018: In a bid to bring all villages under banking coverage, the Odisha government has asked private and public sector banks to deploy business correspondents (BCs) in over 2,300 unbanked villages for extending banking facilities by the end of next month.

The BCs will be required to go to each village and do the usual business for four hours for five days a week, according to Reserve Bank of India (RBI) guidelines. Unbanked villages are those where either there is no brick & mortar branch or banking services are not available within five kilometres.

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.

Earlier, it was targeted to cover 1,474 unbanked gram panchayats with banking facilities. Meanwhile, banking outlets have been opened in 1058 gram panchayats. With rapid strides in the opening of banking outlets, the target of covering the remaining panchayats by March next year will be met.

A ‘banking outlet’ for a domestic scheduled commercial bank (DSCB), a small finance bank (SFB) and a payment bank (PB) is a fixed-point service delivery unit, manned by either bank staff or its business correspondent, where services of acceptance of deposits, encashment of cheques/cash withdrawal or lending of money are provided for a minimum of four hours per day for at least five days a week.

Expressing displeasure over slow pace of credit flow by commercial banks in priority sectors, finance minister Sashi Bhusan Behera recently highlighted over poor lending in seven districts. Though, the overall credit- deposit ratio (CD) ratio in the State is above the bench-marking ratio of 60 per cent, in some districts it is found below 40 per cent. Lead Branch Managers (LDM) of the districts having CD ratio below 40 per cent have been asked to take necessary steps to scale up the CD ratio.

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.

SFBs 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 unorganised sector entities. There is no restriction in the area of operations of SFBs.