After many years of waiting, Pranab Mukherjee says RBI will issue licences to new banks. Is the RBI on the same ground as Pranab Mukherjee? Evidently not! By Gyanendra Kumar Kashyap
Think of financial ‘inclusion’ in India, and you will invariably discover that financial ‘exclusion’ is far too conspicuous. Digest these for some evidence: out of the 600,000 odd villages in the country, only 5.3 per cent have a commercial bank branch, which translates to one branch catering to 26,000 individuals in rural areas. Even if we take the entire country’s population into consideration, only 40 per cent possess a bank account in India, as compared to 95 per cent in the US! The proportion of people possessing any form of life insurance cover is as low as 10 per cent, while those with a non-life insurance is an abysmally low 0.6 per cent. Only 13 per cent Indians possess a debit card, while the credit card cover is as low as 2 per cent. The most recent National Sample Survey Organisation, 2008, study reveals that out of the 89.3 million farming households in the country, 51 per cent did not receive credit from either institutional or non-institutional sources of any kind. Even where 33 million ‘no-frills’ bank accounts are claimed to have been opened, 89 per cent of these accounts are dormant today, as per KC Chakrabarty, Deputy Governor, RBI.
These statistics are perhaps sufficient to prove the extent of financial exclusion in the country. At the same time, there can be no second thoughts on remedial actions that need to be taken in order to unleash the power of fortune at the bottom of the pyramid. Perhaps, it was an admixture of these very glaring statistics, added to the recommendation of the S.S. Tarapore & Raghuram Rajan committee report that played the motivation pill for the Union Finance Minister Pranab Mukherjee, who promised to take a step towards altering this gloomy state of affairs. In his Union Budget 2010-11 statement, he said, “We need to ensure that the [Indian] banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services.
RBI is considering to give some additional banking licenses to private sector players. Non-Banking Financial Companies (NBFCs) could also be considered...” Strong reason to smile for many, but the celebrations are still miles away, thanks to the dictionary which defines a ‘promise’ and a ‘policy’ very differently!
Think of financial ‘inclusion’ in India, and you will invariably discover that financial ‘exclusion’ is far too conspicuous. Digest these for some evidence: out of the 600,000 odd villages in the country, only 5.3 per cent have a commercial bank branch, which translates to one branch catering to 26,000 individuals in rural areas. Even if we take the entire country’s population into consideration, only 40 per cent possess a bank account in India, as compared to 95 per cent in the US! The proportion of people possessing any form of life insurance cover is as low as 10 per cent, while those with a non-life insurance is an abysmally low 0.6 per cent. Only 13 per cent Indians possess a debit card, while the credit card cover is as low as 2 per cent. The most recent National Sample Survey Organisation, 2008, study reveals that out of the 89.3 million farming households in the country, 51 per cent did not receive credit from either institutional or non-institutional sources of any kind. Even where 33 million ‘no-frills’ bank accounts are claimed to have been opened, 89 per cent of these accounts are dormant today, as per KC Chakrabarty, Deputy Governor, RBI.
These statistics are perhaps sufficient to prove the extent of financial exclusion in the country. At the same time, there can be no second thoughts on remedial actions that need to be taken in order to unleash the power of fortune at the bottom of the pyramid. Perhaps, it was an admixture of these very glaring statistics, added to the recommendation of the S.S. Tarapore & Raghuram Rajan committee report that played the motivation pill for the Union Finance Minister Pranab Mukherjee, who promised to take a step towards altering this gloomy state of affairs. In his Union Budget 2010-11 statement, he said, “We need to ensure that the [Indian] banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services.
RBI is considering to give some additional banking licenses to private sector players. Non-Banking Financial Companies (NBFCs) could also be considered...” Strong reason to smile for many, but the celebrations are still miles away, thanks to the dictionary which defines a ‘promise’ and a ‘policy’ very differently!
Read these article :-
Outlook Magazine money editor quits
Don't trust the Indian Media!
No comments:
Post a Comment