Rural banking

SBI mulling transaction based fee for no-frills accounts

MUMBAI: In order to make the operation of no-frills accounts opened
under the financial inclusion plan of the government feasible, State
Bank of India (SBI) is considering the imposition of a charge on every
transaction by account holders.
The bank is confident that a nominal charge, which can be either a
percentage of the amount transacted or a fixed amount, will not
dissuade people from operating no-frills accounts, a senior SBI
official involved in the state run lender's financial inclu sion
initiative said here on strict condition of anonymity.
"The question on our minds is — how do we make the operations of the
model feasible? We can recover the Rs 20,000 required for setting up
infrastructure in a village through a kiosk or palm-held device by
opening around 100 accounts and charging Rs 200 a s account opening
fees," the official said.
Paying a small amount like Rs 3 for a transaction would be preferable
to travelling 20 kilometres to reach a branch, he said, clarifying
that the bank, however, has not finalised any plan yet.
"You cannot have a model under which the financial inclusion roll-out
is subsidised, it needs to be sustainable," he added.
The bank has to take care of recurring expenses like maintaining
back-end systems and paying the business correspondent (BC) operating
on its behalf at the village level, he said. - PTI

Pasted from <http://www.thehindubusinessline.com/businessline/blnus/17241706.htm>