Centre identifies 789 habitations for ultra small branches

The department of financial services under Union finance ministry has identified 789 habitations in 14 Naxal affected districts of Odisha covered under Integrated Action Plan (IAP) for establishment of ultra small branches (USBs).

The 14 districts are Deogarh, Gajapati, Ganjam, Jajpur, Keonjhar, Kandhamal, Koraput, Malkangiri, Mayurbhanj, Nabarangpur, Nayagarh, Rayagada, Sambalpur and Sundergarh.

The establishment of USBs includes two components- capital cost of Rs 1.40 lakh per branch which is to be met out of IAP funds. On the other hand, recurring cost for the branch will be borne by the identified bank.

 “The state government is requested to inform the district level committee that funding of capital cost for the establishment of USB amounting to Rs 1.40 lakh per USB has been included as permissible work under IAP. Necessary action may kindly be taken in this regard and we may be apprised of the action taken in this matter,” Sindhushree Khullar, secretary, Planning Commission, Government of India wrote to R N Senapati, development commissioner cum additional chief secretary.

On a pan-India basis, the department of financial services has identified 7,034 habitations with a population of over 2,000 in 66 districts covered under the IAP in nine states for providing banking services through establishment of USBs. USBs would consist of a small area of 100-200 sq ft where the officer designated by the bank would be available with a laptop on pre-determined day and time in a week. The banking correspondent agent (BCA) would also operate from such premises.

While cash services would be offered by the BCA, the bank officer would offer other services, undertake field verification and follow up the banking transactions. The periodicity and duration of visits can be progressively enhanced depending upon business potential and reviewed periodically. The state finance department had recently urged all district collectors to take stock of progress made with respect to establishment of ultra small branches by commercial banks in Odisha under ‘Financial Inclusion Plan’. It may be noted that the department of financial services under Union finance ministry has underscored the need for setting up USBs in all villages with a population of over 2,000 where brick and mortar branches are currently not viable.

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