Speech by Dr Deepali Pant Joshi, Executive Director of the Reserve Bank of India, at the Vth Dun & Bradstreet Conclave on Financial Inclusion, Kolkatta, 28 October 2013
.....Access to finance for those who are getting crowded out of the credit markets is an equally important element. Therefore, the Reserve Bank has reinforced its efforts to improve financial access, especially for small businesses and individual households. The RBI has set up a Committee on Comprehensive Financial Services for Small Businesses and Low Income Households under the Chairmanship of Dr. Nachiket Mor a Director on the RBI Central Board of Directors. The mandate of the Mor Committee is to frame a clear and detailed vision of financial Inclusion and Financial Deepening in India and to lay down a set of design principles that will guide the development of institutional frameworks and regulation for ensuring these outcomes..........
1 comment:
The presentation is a status report on Financial Inclusion with a good analysis. However there are a few points that need closer attention;
One: the low percapita credit to Basic Savings Deposit account holders is worthy for a detailed look and this will provide the actual risk under Fi that the banks would be willing to take under the score. The penetration is still very low.
2. The Aadhar linkage: Direct Benefit Transfer - it is more on the instruction than implementation. My individual survey indicates that 60 percent of cooking gas subsidy linked to aadhar has not been credited even after two months of delivery of the cylinder in the urban areas due to the NPCL not crediting or delayed crediting of the subsidy to the linked account of the concerned bank; where credited the banks have been taking anywhere between 7 and 15 days for extending credit into the accounts. When this is the scenario of urban clients the rural areas where the clientele are less literate the problems would be much more complex. Further, the Supreme Court has ruled that the linkage cannot be insisted and it does not have legal sanction. Now it is in a limbo. How do NPCL and Banks streamline the whole process and assure proper delivery of the intended DBT? A deeper probe and analysis is required.
3. The FLC programmes require an annual evaluation not as to the number of programmes rolled out but to what extent the trainees have secured the benefit out of these programmes and how it translated to better the FI efforts.
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