India’s Narendra Modi launches bank accounts for all
Indian Prime Minister Narendra Modi has launched a plan to provide a bank account for every household, in a landmark initiative to help the poor.
Nearly 40% of Indians have little access to financial services and are often at the mercy of moneylenders who charge extortionate interest.
Mr Modi has told state and private banks to support the plan.
Officially launching the project on Thursday, Mr Modi said it would give the poor “renewed strength to fight poverty”.
“When a bank account is opened, it’s a step towards joining the economic mainstream.”
Under the banking scheme, account holders would receive a debit card and accident insurance cover of up to 100,000 rupees ($1,654; £996). They would also get an overdraft facility of up to 5,000 rupees.
Tens of thousands of Indians have filed applications to open accounts since the 15 August speech, the Associated Press reports.
Correspondents say increased financial inclusion will help the government pay welfare benefits directly into bank accounts and cut corruption.
But one of the main impediments to the plan could be the lack of identity documents among the poor – people have to produce a number of papers, including birth certificates and proof of address, to open a bank account in India.
But India’s Central Bank Governor Raghuram Rajan has said the scheme will help the poor to gain “economic independence” by providing insurance and credit.
Source: bbc
