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How has been the progress of banking services in rural India?

In pursuance of RBI guidelines, rolling out of banking outlets in uncovered areas is a continuous process and looked after by State Level Bankers’ Committee (SLBC), in consultation with the respective states, banks and other stakeholders

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In order to ensure availability of banking outlets -- bank branches, Business Correspondents (BC), within 5 kilometers of all inhabited villages, the Government of India has launched a Geographic Information System (GIS) based app, namely, Jan Dhan Darshak app (JDD app) developed by National Informatics Centre (NIC), Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs said in a written reply to a question in Lok Sabha.

Banks have been provided login credentials to upload the GIS location of their branches, business correspondents and ATMs on the app. As per JDD app, there are 1.66 lakh branches, 4.35 lakh BCs and 2.07 lakhs ATMs mapped by the banks. Further, as per data uploaded by the banks on the app, out of the 5.53 lakh mapped villages on the app, 5.52 lakh (99.8 percent) villages are having branches or BC within 5 kilometers distance, the minister said.

Giving more details, Thakur said, as per extant guidelines dated May 18, 2017 on rationalisation of Branch Authorisation Policy, Reserve Bank of India (RBI) had granted general permission to domestic Scheduled Commercial Banks -- excluding Regional Rural Banks-- to open banking outlets at any place in the country, without seeking prior approval of RBI in each case, subject to at least 25 percent of the total number of banking outlets opened during a financial year being in unbanked rural centres i.e. centres having population less than 10,000 (Tier 5 and Tier 6 centres). Further, 10 Small Finance Banks and six Payment Banks have been licensed by RBI for providing banking services across the country including the rural centres.

Under Pradhan Mantri Jan-Dhan Yojana (PMJDY), all villages were mapped by banks into 1.59 lakh Sub-Service Areas (SSAs) with one SSA catering to 1,000 to 1,500 households. While 33,000 SSAs have been covered with bank branches, 1.26 lakh SSAs, have been covered by deployment of interoperable Business Correspondents (BCs), he further said.

In pursuance of RBI guidelines, rolling out of banking outlets in uncovered areas is a continuous process and looked after by State Level Bankers’ Committee (SLBC), in consultation with the concerned state governments, member banks and other stakeholders. Banks, inter-alia, consider proposals for opening banking outlets in the light of RBI’s instructions, their business plans and their commercial viability. To further assess the viability for opening a banking outlet, banks carry out survey as required, Thakur added.

As informed by SLBC, Haryana and SLBC Bihar, all the gram panchayats and blocks in these states are covered with banking services by bank branches and business correspondents, the minster stated.

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