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Informist, Tuesday, Dec. 3, 2024

 

NEW DELHI – Reserve Bank of India Deputy Governor Swaminathan J. said banks should adopt a data-based empirical approach when designing credit plans. "Such techniques provide the ease with which targeted strategies can be developed for intervention," Swaminathan said at a conference for Lead District Managers of Maharashtra on Saturday. 

 

When collecting data for designing credit plans, the first step should be field surveys, which should not be substituted by "just an academic understanding", Swaminathan said. "The field surveys also enable (one) to identify those areas which are more in need of credit flow and have a better capability of servicing the loans. This should be the premise on which you formulate bankable schemes," he said.

 

Credit planning should also have a "bottom-up approach" so that plans which address local credit needs are designed, the deputy governor said. He added that about half of the self-help groups are yet to be linked to formal credit, and a large proportion of small and marginal farmers still lack access to bank financing. Micro, small, and medium enterprises, especially those led by women, have also been underserved in terms of credit, the deputy governor said.

 

"When we adopt an empirical approach, coupled with your on-ground experience for designing a credit plan, the credit requirements of such segments can be effectively addressed through suitable Potential Linked Credit Plans, as well as in block and district-level credit strategies," Swaminahan said.

 

Banks should also undertake efforts to make the public aware of various financial products available to them, including social security products such as insurance and pension schemes, Swaminathan said. Banks should harness technology that will expand their reach and make banking more accessible, efficient, and cost-effective, the deputy governor said.

 

Swaminathan also told banks about the importance of sustainable financing at the conference. "In the present milieu, we need to encourage financing that supports sustainable and climate-resilient practices, to mitigate climate risks and protect vital livelihoods," he said. "The avenues to bring about these changes are more amplified in agriculture and rural infrastructure. You, working at the ground level, have the platform to motivate the change required to drive the country towards a green economy," the deputy governor added.  End

 

Reported by Shubham Rana

Edited by Namrata Rao

 

 

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