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Informist, Wednesday, Sep 25, 2024

 

--RBI Swaminathan: Lot of ground to cover to deepen fincl inclusion 

--CONTEXT: Comments from speech by RBI Dy Governor Swaminathan 

 

MUMBAI - While financial inclusion in India has improved over the years, there is still a lot of ground to cover to make banking and financial services accessible to everyone, Swaminathan J, deputy governor of the Reserve Bank of India said at a conference on Friday, the speech of which was uploaded on the central bank's website today.

 

In his address at the Conference of Lead District Managers and District Development Managers in Bengaluru, Swaminathan said a greater focus is required to promote the use of such services, and to improve their quality. He stressed on the importance of lead district managers of banks and district development managers of the National Bank for Agriculture and Rural Development to improve access to financial services.

 

He said the formulation, monitoring, and implementation of credit plans must follow a bottom-up approach. To do the same, it is important to have a comprehensive understanding of a district. It would help in leveraging data analytics and field surveys to help deepen the credit access.

 

Stating the importance of profiling a district, Swaminathan said it would also improve the feedback mechanism, leading to the formulation of targeted credit plans. "Lead district managers must take into account the scope for lending indicated in the potential linked plan as well as the past record of achievement in credit disbursement while formalising the credit plans for the blocks and districts under their charge," he said.

 

Although there has been an improvement in credit access to priority sectors, there were still gaps which need to be addressed, especially regarding micro, small, and medium enterprises, he said. Similarly, almost half of self-help groups, and a large proportion of small and marginal farmers, did not have access to formal credit. He said credit requirements for such groups needed to find ways in the block-level and district-level credit strategies.

 

Further, he said there was a need to bridge the gender gap in credit access too. Less than 20% of micro, small, and medium enterprises were owned by women, and such entrepreneurs often encounter hurdles such as social barriers, and access to affordable finance. "It is therefore, crucial to bridge the gender gap," the deputy governor said. "At the district level, this can be addressed by offering support to women-led enterprises through government-sponsored programmes and tailored banking schemes for women-owned businesses."  

 

Swaminathan stated that while credit providers should definitely be in the forefront to make financial services accessible, there was also a need to broaden financial literacy. "Members of the public should be made aware of various financial products available to them," the deputy governor said. "A special focus needs to be given to Digital Financial Literacy for improving public confidence in undertaking digital transactions." An increased financial literacy would help banks expand areas of fintech application.  End

 

Reported by Sourabh Kumar

Edited by Vandana Hingorani

 

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