Date:18/07/2008 URL: http://www.thehindu.com/2008/07/18/stories/2008071860890800.htm

Tamil Nadu

20% of households in State shun banking

Staff Reporter

CHENNAI: Every willing household in Puducherry should have a bank account. This was the aim of the Reserve Bank of India’s pilot project for 100 per cent financial inclusion. Financial inclusion is a term used to understand how many people use banking facilities.

Puducherry was chosen because of its high level of literacy. But, 18 per cent of the households there did not want to open a bank account though bankers were going door to door, said Madhavi Sharma, General Manager, RBI.

And in Tamil Nadu, it is around 20 per cent, she said, addressing a national conference on microfinance and financial inclusion, organised by the International Network of Alternative Financial Institutions (INAFI), here on Tuesday. She said studies need to be conducted to find out why the people did not want to use banks.

Citing a study done by Boston Consulting Group, S. Elangovan, General Manager, Indian Overseas Bank, Chennai, said 130 million people in India were out of institutional coverage.

Just having access to credit instruments did not guarantee development; the key was creation of real assets, said K.V. Raghavulu, Chief General Manager of the NABARD.