Asia’s largest slum colony gets its first ATM

MUMBAI: The country’s commercial capital Mumbai saw its largest slum population get its first state-owned bank branch and ATM at Dharavi on Monday. Also known as Asia’s largest slum, Dharavi has a population of over a million people engaged in production of goods worth over $665 million annually.

Speaking at the inaugural function of Indian Bank’s branch at Dharavi, Usha Thorat, the Reserve Bank of India’s deputy governor, reiterated that the fast pace of economic growth at over 9% has resulted in over 50 million households rising above from the low income categories, according to NCAER estimates.

Indian Bank chairman and managing director KC Chakrabarty said, “Given that 60% of the country’s population is unbanked, mass banking could be a viable business if it has the backing of a strong model and proper technology.” Citing the reports from the Boston Consulting Group, he pointed out that via financial inclusion, banks could look at tapping nearly a billion customers, including the urban poor as well.

So far, the bank has opened 7,000 bank accounts. It is also looking at providing products like insurance and mutual funds and use its core banking platform to provide low-cost fund transfer facilities to migrant labourers, having families settled elsewhere. The bank so far has opened 2,60,000 `no-frill’ accounts and has provided life insurance to 1,40,000 customers.

Ms Thorat stressed on the availability of banking facilities to all sections of the society at an affordable cost. She added that this being the pilot project, it will be watched closely and replicated in other pockets. Community-based organisations need to work with banks to complete financial inclusion.

“Every state has, at least, one district under the State Level Bankers’ Committee, but in order to achieve 100% financial inclusion, the SLBC should cover the entire state,” added the deputy governor.

So far, most poor migrant workers living in these areas found it difficult to open bank accounts due to the inability to provide a proof of residence. While 40% of residents are employed with permanent jobs, 35% of them are self-employed. Around 37% of the people living in Dharavi hail from southern districts of Tirunelveli and Salem in Tamil Nadu, while another 34% belong to hinterlands of Maharashtra.