An Indian Civilizational Perspective

Zero-Balance Bank Account in India

While this is a laudable effort.. it takes out the need for the banks to innovate! I remember listening to CK Prahlad once… and he quoted a case study with Citibank in India where they were challenged to help the rural masses create bank accounts with the ATM facilities having a balance of just Rs 1000 ($25)!! And still make it profitable! They found out a way to link the ATM bank branches thru satellite dishes… and make it work!

And yes.. the profit margin was well over 20%!

The Reserve Bank of India has instructed banks to introduce zero-balance account to enable the masses to avail banking facilities.

“To improve the performance of banks, the zero-balance account will be introduced as a new concept,” RBI Governor Y V Reddy said after a day-long meeting with bankers and government officials.

Under this scheme, customers can open an account by just filling a form without depositing any money. They can also avail a credit advantage starting with Rs 100 which can be enhanced on repayments.

The new system, to be introduced throughout the country, would envisage better bank-customer relationship and develop a customer base, Reddy said.

On the northeast scenario, the RBI Governor said the poor economic activities reflected on the dismal credit-deposit ratio for the banks. “We had an intensive dialogue on this matter and instructed to give a thrust to ease constraints for development in these special category states of the region.”

read more

Get Drishtikone Updates
in your inbox

Subscribe to Drishtikone updates and get interesting stuff and updates to your email inbox.

Leave A Reply

Your email address will not be published.

Get Drishtikone Updates
in your inbox

Subscribe to Drishtikone updates and get interesting stuff and updates to your email inbox.