India attempts the impossible in banking to boost its floundering banking industry.
The Ministry of Finance has asked banks to ensure that at least one person per family in India has a bank account within the next six months. The government believes a bank account in every family will help the government and its agencies use it for electronic fund transfer of wages, salaries or payments to suppliers.
"All the payments from the government will be done electronically directly into the account to reduce leakage," said Finance Minister Pranab Mukherjee.
The ministry believes Indian banks can easily achieve this target given their success in the two-year national financial inclusion programme. As of this March, over 73,000 villages having a population of above 2,000 now have a bank presence.
The ministry also said that Internet-based technology will make it possible for banks to achieve the target. It suggested that each bank account holder receive an ATM card. This will be compulsory.
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