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Just 58.7% of households avail of banking services

We have encouraged banks to leverage technology to attain greater reach and penetration while keeping the cost of providing financial services to the minimum, Dr KC Chakrabarty said

June 10, 2013 11:07 IST | India Infoline News Service
The Reserve Bank of India said that banks need to develop new products and design new delivery models that are customized to the unique needs of the financially excluded population, both in the rural and urban areas.

The data released from the recent census of India indicates that only 58.7% of households in India avail of banking services with the figure being 54.4% for rural areas and 67.8% for urban areas.

We have encouraged banks to leverage technology to attain greater reach and penetration while keeping the cost of providing financial services to the minimum. While we remain technology neutral, we require banks to seamlessly integrate whatever technology they choose, Dr KC Chakrabarty, Deputy Governor, RBI, said.

Dr Charkrabarty was speaking at the inaugural session of the 32nd Skoch Summit on the theme of ‘Regaining 8% Growth with Equity’ on Friday.

We have sought to adopt a structured and planned approach towards FI by not just focussing on improving access to financial services but also encouraging demand for financial services through financial literacy initiatives, Dr Chakrabarty further said.

In the RBI Annual Policy Statement for 2013-14, banks have been advised to consider frontloading (prioritizing) the opening of branches in unbanked rural centres over a three year cycle co-terminus with their FIPs. This is expected to facilitate the branch expansion in unbanked rural centres.

An integrated approach has been adopted for achieving financial inclusion through financial literacy. Financial Literacy Centres and rural branches of scheduled commercial banks have been advised to conduct outdoor Financial Literacy Camps at least once a month.

Greater emphasis is being placed on volume of transactions carried out through the newly opened bank accounts.

However, banks are yet to develop sustainable and scalable business and delivery models to guide their FI initiatives.

While access to financial services has improved, the usage of the financial infrastructure continues to be tardy. While more than 2.70 lakh banking outlets are available across the country, the number of transactions in these accounts remains unimpressive. For instance, nearly half of the Basic Savings Bank Deposit accounts are not seeing transactions, Dr Chakrabarty elaborated.

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