Banks may soon be mandated to issue credit cards with no frill accounts which they open in rural areas. A senior official of RBI revealed that banks would soon be asked to extend this facility to all those account holders who are eligible for the same. This act of the RBI comes as another step ahead to achieve financial inclusion which is the need of the hour.

According to K C Chakrabarty, Deputy Governor, RBI, charges on non maintenance of no frill accounts are set to go. "We have asked banks to offer at least four facilities along with the no-frills accounts. The products include a savings product, an overdraft facility and a credit facility."

He also said that the bank has to give credit card to every deserving account holder. "For those who are not deserving, banks have been asked to educate them and make people deserving to use a credit card," he said.

This directive of the RBI would come at a point when banks are rolling back their credit card exposure after being hit with rising NPAs after the global financial crisis.

This step by the central bank is a strong step as there are many criteria that need to be fulfilled before allotting a credit card to a normal person. Rural people may not fulfill all such criteria.

"The credit limit on the such cards will be low compared with other cards," M Narendra, executive director of Bank of India, said.

RBI projections expect scheduled commercial banks to cover 4 lakh out of the 6 lakh unbanked Indian villages in the next five years.

"Regional rural banks will reach out to around one lakh villages," he added.

"The financial inclusion programme for banks will be viable only after the fourth year," S Sridhar, CMD of Central Bank of india said.