Thaindian News

Agartala, May 18 (IANS) Financial inclusion covering most Indians, fiscal literacy and priority sector lending are at the core of the Reserve Bank of India’s mandate, its governor D. Subbarao said here Wednesday.

After inaugurating the RBI’s sub-office in Tripura capital, Subbarao said : “Mainstream banking services in any forms would be provided to all unbanked semi-urban, rural and remote areas having population of 2,000.”

“Of the six lakh unbanked villages in India, 30,000 having population of 2,000 or more would be covered with banking services by March next year and 70,000 more villages would be covered in the next financial year,” the RBI chief said.

He said: “Where bank branches could not be set up, the central bank has asked all the banks to engage retired bank officials, locals and societies (moving with biometric and other devices) as business correspondents to extend the banking services to all the adult citizens.”

Subbarao stressed that banks are yet to view financial inclusion as an opportunity and it would increase the asset liability of the financial institutions.

“Financial inclusion is good for both banks and governments at it would check inflation.”

He said that the RBI’s battle against inflation would further be intensified.

The RBI governor asked the banks to develop their own business models to achieve financial inclusion as the central bank does not believe in imposing any pre designed model on them.

He reiterated that by increasing the flow of credit to the people, the credit-deposit (CD) ratio would be further increased in the northeastern region, where it is around 30 to 35 percent against the 70 percent ratio in other states.

Urging the Indian Institute of Technologies (IITs) and other technical institutions to buildup a strong base of entrepreneurship in the northeastern region, Subbarao said that intellectual leadership is the need of the hour.

“We know that the northeastern region has different set of challenges and required different set of solutions. The RBI and banks alone could not deal with these challenges, there must a collective approach by all concerned.”

He earlier inaugurated Newsibition, a visual exhibition of the 75-years history of the Reserve Bank. The ten-day long exhibition is titled “Mint Road Milestones in Agartala.”