New Delhi, Feb 21 (ANI): The Union Cabinet today gave its approval to proposals for establishing a Financial Inclusion Fund (FIF) and a Financial Inclusion Technology Fund (FITF).

The proposal includes a maximum amount of Rs. 2 billion to be contributed by the Central Government to the Financial Inclusion Fund over a maximum period of five years and a maximum amount of Rs. 2 billion to be contributed by the Central Government to the Financial Inclusion Technology Fund over a maximum period of five years.

The Finance Minister in the Union Budget speech for 2007-08 had announced the Constitution of FIF and FITF with an overall corpus of Rs. 5 billion each with initial funding to be contributed by the Central Government, Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD).

The objectives of the FIF shall be to support “developmental and promotional activities” with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions and hitherto unbanked areas.

The objectives of FITF shall be to enhance investment in Information Communication Technology (ICT) aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, increase the technological absorption capacity of financial service providers and users and encourage an environment of innovation and cooperation among stakeholders.

The constitution of these funds would ensure access to timely and adequate credit and financial services by vulnerable groups such as the weaker sections and low-income groups at an affordable cost. (ANI)