Project Jahrkhand: New initiative of HDFC Bank

Project Jahrkhand: New initiative of HDFC Bank
By Vaibhav Aggarwal
Oct 3, 2008

HDFC Bank on September 30th launched its financial inclusion
programme-`Project Jharkhand' in Ranchi under the aegis of the
Reserve Bank of India.

Under this project, HDFC has kick started the country's first Common Service Centre (CSC) with banking services in the state. The bank plans to install machines at Common Service Centres (CSC) in the villages where people would need to make use of smart cards only to withdraw or deposit cash in their bank account. HDFC Bank has first adopted the Chakala village near Ranchi to implement the project.

The programme envisages covering over 45 lakh households in the
state through both CSC and village adoption models, subject to
regulatory provision.

CSC is a primary element of the Central Government's National e-
Governance Plan (NEGP). The Union government under NEGP has set up a Common Service Centre (CSC), also known as Pragya Kendra. The
government plans to set up over 5,000 CSCs in Jharkhand and about
1,00,000 in the country.

These CSCs will provide the rural population with a variety of
services ranging from public information services, e-governance
services, educational services to agri related and financial
services. Besides it will also act like a `Human ATM' that the rural
people can use to withdraw and deposit cash.

G. Subramanian, the country head of internal controls and compliance risk at HDFC, said: "We are trying to take technology driven world class banking services at the doorsteps of people. It will promote micro financing for people involved in agricultural activities and small and cottage industries."

"HDFC Bank will use the CSC infrastructure backbone to bring world
class banking services to the doors of the unbanked and underbanked
areas and offer financial services such as credit, savings,
insurance and remittances in a sustainable manner," he added.

The new technology will save people from traveling to nearby towns
to operate their bank accounts. In the beginning, the facilities
that would be available are cash withdrawal and deposit. But the
bank plans to extend it to loan sanctions and even payment of
pensions, or schemes like NREGS and others.

Mr. Subramaniam said, "With a majority of India's population
residing in rural India, it is imperative that they also benefit and are a part of India's progress and development. HDFC Bank believes that initiatives such as the financial inclusion have the potential to change the face of rural India which in turn will also improve the socio-economic factors at the rural level and contribute towards overall development for the country."

Rabi N. Mishra, the general manager of RBI, appreciated the
initiative of HDFC and said, "It may appear in the first instance
that taking banking to the sections constituting "the bottom of the
pyramid", may not be profitable but it should always be remembered
that even the relatively low margins on high volumes can be a very
profitable proposition. Financial inclusion can emerge as commercial profitable business. We at RBI are committed to support HDFC Bank in its endeavors to propagate greater financial inclusion."

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