The convenience of door-step banking will play a big role in bringing about change

- Banks consider the economic activities of the area, not the convenience of the people, before opening new branches.

- Need for effective banking facility to motivate poor people to save

For effective financial inclusion, banks need to reach out to low-income and economically weaker people. The size of deposits that financially weak people can deposit is very large. Rural poverty and financial inclusion are intertwined. An NSO report on consumption expenditure was withdrawn by the government in November 2016 on the basis of statistical quality, which showed that rural poverty in the country had increased by about 3 per cent to 30 per cent between 2011-12 and 2016-17. It may be mentioned here that during this same period, urban poverty has come down by 9 percentage points to 9 percent.

As of March 2017, banks in India had more than 150,000 branches and more than two lakh ATMs. Banks consider the economic activities of the area before opening any branch.

That is why there is no need to criticize banks for 4.5 branches in rural areas (only one-third bank branches in rural areas with two-thirds of the population).

Banking (or Business) Correspondent Model - The next best option for real bank branches near ATM kiosks, which was created in 2006 to reach banks.

He was given the responsibility of collecting deposits (also used to withdraw money instead of ATMs). But ATMs are mostly near bank branches. For security reasons, ATMs have been shut down in many unsafe places, which may otherwise provide partial banking services to people in areas where there is no presence near banks. In April 2016, considering the importance of intermediaries, the Reserve Bank of India issued a guideline that Bank Mitra would be linked to certain bank branches.

It also states that in rural, semi-urban and urban areas, the distance between Bank Mitra's place of business and the main branch should not exceed 15 km, while in metros - Metro City it may be up to 5 km, but this model has not been successful.

Banking correspondents were re-appointed by banks to meet the growing demand for opening new Jan-Dhan accounts during the initial phase of the lockdown during the Corona epidemic last year.

A year ago (before the epidemic), a study of IIM-Calcutta, covering 1,000 sample public-account holders from five districts of West Bengal, observed the activity of bank visits by economically weaker account holders. It found that 4.5 per cent of respondents whose bank branch is within 1 km visit their bank branch once a month and about 41% of respondents do not visit their bank branch more than once in more than three months. Six per cent of the respondents said that they visit the branch only once in a fortnight if the distance is more than 5 km, and half of them are occasional visitors as they visit their bank branch as per the need.

Money lenders in the unorganized sector have no time constraints and are therefore more popular among the economically weaker sections for borrowing money even if they charge higher interest rates. Thus, door-step banking may be the only way to get the economically weaker people interested in formal banking.

Also, in order to hire unemployed educated youth as banking correspondents, their remuneration has to be made more acceptable in terms of a certain (monthly, timed) and other benefits (depending on the number of customers). Apart from this, experts believe that a bank friend will not be able to handle more than 1,200 houses / buildings (approximately 5,000 population), and so with the current number of approximately 250,000 banking correspondents in the country, this model should be revived. .

Still, Indians rely more on state-owned banks than private ones to open bank accounts. Therefore, efforts need to be made to facilitate the access of government banks to the hinterland. In addition, bank employees should behave in a cooperative manner and create an environment where more people can avail banking facilities.