banking account to all those desirous of opening a bank account. several other aspects such as simplified kyc, ots for loans upto rs 25000, offering a gcc / simplified overdrafts etc were also covered. a decentralized approach was advocated through targeting 100 % financial inclusion district by district involving the dcc and bank and government officials to facilitate enrolment and identification. another very important policy measure in january 2006 was to allow banks to adopt the agency model or what is known as the business facilitator / business correspondent model for achieving greater outreach through intermediaries / agents. the results have been extremely impressive. in just two years the number of no frills accounts opened by banks has increased from around half a million accounts in march 2006 to 15 million in 2008. going by the data from service providers offering smart card solutions, it may be assumed that smart card accounts probably account for 2 to 3 million of these no frills accounts. evaluation by external agencies appointed by rbi has shown that while the first stage of opening no frills accounts has been quite impressive, due to inadequate f follow up, cost of transaction and access constraints, in many cases the accounts have not been operated upon at all after having been opened. in order to improve access and use of these accounts, banks will have to offer the services much closer to the customer either through mobile branches, satellite offices, extension counters or using intermediaries like shgs / mfis or through business correspondents using it to increase scale, access and reduce cost. also as is obvious from the results of these recent studies and surveys, the credit product that has to be offered, if the low income borrowers have to be brought into the formal system, has to be simple covering all the needs of small borrowers. i have absolutely no doubt that the simple overdraft or gcc based on cash flow / track record is the way forward to meet the challenges of providing access to the large numbers currently excluded. shgs and mfis role in fi the need for informality in credit delivery and easy access is demonstrated by the fact that shgs and mfis constitute the fastest growing segment in recent years in reaching out to small borrowers. these institutions are able to effectively address the small ticket and last mile issues. in the four years between 2003 and 2007, small borrower bank accounts ( credit ) i. e. upto rs 25000 increased marginally from 36

. 9 million to 38. 6 million, while shgs ’ borrowing members grew from 10 million to 40. 5 million and mfis ’ borrowers grew from 1. 1 million to 8 million. in 2007 - 08, mfis have added 6 million clients increasing their outreach to 14 million as per data brought out by sa daan. role of ict in fi to be able to ensure that the challenges of banking the unbanked are met effectively and converted into growing and sustainable business for banks, there is no alternative to adoption of ict solutions on a very large scale and range. ict solutions are required to capture customer details, facilitate unique identification, ensure reliable and uninterrupted connectivity to remote areas and across multiple channels of delivery, offer multiple financial products ( banking, insurance, capital market ) through same delivery channel while ensuring consumer protection, develop comprehensive and reliable credit information system so essential for efficient credit delivery and credit pricing, develop appropriate products tailored to local needs and segments, provide customer education and counseling, enable use of multi media and multi - language for dissemination of information and advice. ict for fi – rbi initiatives i now turn to the specific initiatives of rbi in regard to ict for financial inclusion. the very first initiative was emphasizing the use of it solutions while adopting the agency or bc model for financial inclusion. a paper placed on the rbi website has envisaged a scheme with rbi support for providing satellite connectivity for remote area branches. the reports of three working groups set up by rbi to consider support to rrbs and ucbs in computerizing their operations and adopt it solutions for financial inclusion have been placed in public domain for comments. these groups have recommended that the idrbt could offer interest free loans to ucbs and rrbs for adoption of it. based on comments and response rbi will be firming up these schemes. recognizing the penetration of mobile phones ( including amongst the low income population ) and the enormous opportunities they offer in extending the banking outreach. rbi had placed a paper on mobile banking in the public domain and the guidelines are now being finalized. the nfs is able to offer nationwide networking of atms and can facilitate banking transactions including remittances through atms linked to the nfs. effective from april 1, 2009 a customer will be able to use any atm ( including other bank atms ) to operate his / her account at no cost. other initiatives include those aimed at ensuring quicker, safer currency and funds transfer. in fact rbi has put on