Narendra Modi to announce financial inclusion mission on Independence Day

Narendra Modi

New Delhi, Aug 14: Prime Minister Narendra Modi is expected to unveil an ambitious financial inclusion scheme on the Independence Day tomorrow to provide bank accounts to 15 crore poor persons with an overdraft facility of Rs 5,000 and accident insurance of Rs 1 lakh.

The-two phase Financial Inclusion Mission, which has been approved by the Cabinet, will be formally launched by Modi here at the end of this month, sources said.

The government is gearing up to operationalise the scheme across the country on August 28 or 29, they added. The scheme, to be pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore identified households by August 2018.

The main features of the scheme include Rs 5,000 overdraft facility for Aadhar-linked accounts, Ru Pay Debit Card with inbuilt Rs 1 lakh accident insurance cover and minimum monthly renumeration of Rs 5,000 to business correspondents who will provide the last link between the account holders and the bank.

The new scheme, sources said, is a significant improvement over the UPA’s financial inclusion programme.

The earlier scheme had no focus on households and no emphasis was given on urban financial inclusion, according to some experts. Besides, they maintained that there was a cumbersome Know Your Customer formality, restricting account opening.

Other deficiencies cited included lack of credit disbursement and 47 per cent of business correspondents being untraceable, resulting in inactive accounts.

The new scheme, sources said, has tried to address all the possible deficiencies and its monitoring would be done at state and district levels.

The ‘mission mode’ approach has been envisaged with the Finance Minister as head of the mission.