NEW DELHI: India’s state-owned banks are conducting a massive campaign to open millions of accounts for poor Indians who are off the financial grid and vulnerable to black market money lenders.
Tens of thousands have already lined up to open accounts since Prime Minister Narendra Modi announced the campaign in his Independence Day speech to the nation on August 15, bank managers said on Thursday.
Modi urged banks in a recent letter to “try your best to ensure that no one is left without a bank account.” The goal is to sign up 150 million people by 2018. About half of India’s 1.2 billion people lack bank accounts.
“This is a national priority and we must rise to meet this challenge,” Modi’s letter said, according to his website. “There is an urgency to this exercise, as all other development activities are hindered by this single disability.”
The four-year program may also help beat back the endemic corruption affecting almost every level of Indian bureaucracy, by channelling government welfare and work payments directly into the accounts of individuals rather than through regional and local offices.
“Any help the government provides will be deposited ... that is why I opened this account,” said Ramesh Singh, a 27-year-old chauffeur, as he lined up to submit his paperwork at a bank branch in the southern suburbs of New Delhi.
The accounts are unique in that they would stay open without penalty even if empty, a key condition for keeping enrolled the hundreds of millions of impoverished Indians earning about a dollar a day or less.
As an incentive, the federal government is providing 100,000 rupees (Dh6,000) in life insurance to every account holder.
Dozens of state banks with more than 100,000 branches countrywide are participating.