Financial exclusion, RBI style

.............Ask the average Indian household what is and has been its everyday inflation experience and what it expects on this front. Then look at what the RBI says it has “achieved” on this front. We will know the vast gulf. (The irony here is that households’ inflation expectations are also part of the RBI’s policy documents. But, these are simply ignored as the central bank pats itself on its inflation performance with respect to a price index which, even more ironically, has no relevance for the average household at all!) The conflict between what the RBI says and what it actually does is equally stark in its regulatory/supervisory role. Financial inclusion is a critical objective for us, the RBI says. Indeed, it should be when Census 2011 says that 50 per cent of Indian households do not have any banking services at all..............

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