The Reserve Bank of India (RBI) and the Union government are working in tandem to make banks push the agenda on inclusive growth, both in numbers and spirit.
The finance ministry has asked public sector banks to list their achievements and targets for financial inclusion for 2010-11. RBI has asked for board-approved plans for financial inclusion.
The ministry has asked banks for a provisional statement of intents (SoIs) for 2010-11 this week, which should also mention their plans for financial inclusion, bankers said. The final SoI will go after board approval.
This is the first time banks’ SoI will have such a parameter. According to a chairman of a public sector bank, the government wants to know how many villages having more than 2,000 people are being adopted by the banks and the number of accounts opened so far, and the target for 2010-11.
In addition, the ministry has asked banks to specify performance and plans for regional rural banks (RRBs). However, the latter is only applicable for those banks which sponsor RRBs. Bankers see the government’s move in sync with the larger vision of its owner of providing banking services to all villages having a population of more than 2,000 by March 2012. There are about 64,000 villages, out of 600,000 in the country, which have a population of more than 2,000 but are deprived of a formal banking channel.
Over the past two weeks, the government also held two rounds of meetings with senior officials of public sector banks to take stock on their financial inclusion efforts and had discussed implementation issues. Bankers have highlighted the establishment cost of setting up banking service in rural areas, as they may not earn money for at least three years on their investments. The government said it was open to the idea of providing a subvention in the initial years.
In December last year, government told the banks to send their SoIs for 2010-11. Now the government wants a fresh SoI, with these two additional targets. All other targets remain the same. Like last year, on the business front, the government asked for the target on current and savings account deposits, not total deposits — a practice started last year.
The finance ministry has asked public sector banks to list their achievements and targets for financial inclusion for 2010-11. RBI has asked for board-approved plans for financial inclusion.
The ministry has asked banks for a provisional statement of intents (SoIs) for 2010-11 this week, which should also mention their plans for financial inclusion, bankers said. The final SoI will go after board approval.
This is the first time banks’ SoI will have such a parameter. According to a chairman of a public sector bank, the government wants to know how many villages having more than 2,000 people are being adopted by the banks and the number of accounts opened so far, and the target for 2010-11.
In addition, the ministry has asked banks to specify performance and plans for regional rural banks (RRBs). However, the latter is only applicable for those banks which sponsor RRBs. Bankers see the government’s move in sync with the larger vision of its owner of providing banking services to all villages having a population of more than 2,000 by March 2012. There are about 64,000 villages, out of 600,000 in the country, which have a population of more than 2,000 but are deprived of a formal banking channel.
Over the past two weeks, the government also held two rounds of meetings with senior officials of public sector banks to take stock on their financial inclusion efforts and had discussed implementation issues. Bankers have highlighted the establishment cost of setting up banking service in rural areas, as they may not earn money for at least three years on their investments. The government said it was open to the idea of providing a subvention in the initial years.
In December last year, government told the banks to send their SoIs for 2010-11. Now the government wants a fresh SoI, with these two additional targets. All other targets remain the same. Like last year, on the business front, the government asked for the target on current and savings account deposits, not total deposits — a practice started last year.
