item that applications made by wal - mart to cash cheques at its 44 stores has been approved by the division of banking in massachusetts mainly on grounds of providing facility to the unbanked. in some jurisdictions, non bank entities are being allowed to provide payment and account maintaining facility without bank account - through e - money - to meet the needs of the unbanked. in developing countries, the added dimension, and the main difference is that the focus of financial inclusion is on promoting sustainable development and generating employment for a vast majority of the population especially in the rural areas. in yesterday ’ s address in bancon, deputy governor dr. rakesh mohan has elaborately laid out the position for india and the data analysed by him speaks for itself. rather than repeating the figures, let ’ s just take a look at a few facts. in march 2005, commercial banks had 338 million savings and current accounts as against 290 million in 2000. rural accounts went up from 172 million to 200 million – representing an increase of 28 million, while urban accounts increased by 20 million from 118 million to 138 million. the rate of growth annually was around 3 % just a little over the population growthstate wise data would show certain areas where there is hardly any increase. the number of loan accounts increased from 54 million in 2000 to 77 million in march 2005 ( 7. 3 % cagr ). however the higher growth rate was on account of urban areas. in rural areas, the number of loan accounts went up from 40 million to 47 million ( 3. 3 % ) whereas the urban areas showed a stronger growth from 14 million to 30 million loan account or growth rate of 16. 5 %. the growth in the number of small borrower accounts in rural areas was even lower at 2. 5 % whereas the growth in the number for urban areas was 13. 8 % between 2000 and 2005. there has been hardly any increase in outreach or scale in the last five years except for some growth in branches and loan accounts in urban areas. number of bank offices in rural areas remained more or less the same - 47253 in 2000 to 47586 in 2005 - while they rose from 19808 to 22383 in urban areas. current and savings accounts per branch in rural areas rose from 3650 to 4202 and from 5965 to 6155 in urban areas. the number of loan accounts per branch rose from 844 in 2000 to 1003 in 2005 while in urban areas the number increased from 731

to 1335. these data bring out the spurt in urban retail lending in recent time – but this has not been matched by similar growth in savings accounts in both rural and urban areas or growth in loan accounts in rural areas. on the other hand, there are 93 million mobile users today – the cagr since 1999 is 85 %. the number of mobile phones currently is more than the number of borrowers from the banking system. there is a clear need to increase the outreach and scale up operations at existing outlets. use of technology the use of it is inevitable to improve the usage of existing branch infrastructure. increasing outreach and up scaling number of accounts at each branch will require bankers to move out of their branches and source clients and then look at low cost delivery alternatives once the account relationship is established. opening a no frills account with a small overdraft or gcc is only the first step in building the relationship which would require sustained efforts to ensure that the banking relationship with the customer is fashioned to meet his needs. it can reduce cost and time in processing of applications, maintaining and reconciliation of accounts and enable banks to use their staff at branches for making that critical minimum effort in sustaining relationship especially with new accountholders. in rural areas customers cannot be expected to come to branches in view of opportunity cost and time and hence banks will have to reach out through a variety of devices such as weekly banking, mobile banking, satellite offices, rural atms and use of post offices. in urban and even in rural areas where mobile phones have penetrated, banks could use mobile technology for facilitating banking transactions. mobile phones can be used to transfer funds real time from and to bank accounts and could make remittances and payments at very low cost. once the data base and track record is established, a multitude of financial services can be offered including savings, remittance, transaction banking such as receipt of salaries, pensions and payments for utilities, loan including home loans, insurance and mf products. here the branches can render more business and variety of products to existing clientele as also source new customers within the area of operation. financial inclusion offers a huge potential for business in terms of resources and assets and banks therefore need to take aggressive steps to use technology, business processes and personnel to be able to exploit this potential in innovative and creative ways. in a branch banking model, local community based organizations or respected persons could be used to deal with the information asymmetry problem by leveraging the knowledge about customers