Financial Daily from THE HINDU group of publications
Friday, Feb 18, 2005
Financial Daily from THE HINDU group of publications Friday, Feb 18, 2005 |
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Opinion
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Letters Rural credit
That the "Government plans to trim holdings in all public sector banks to 51 per cent" (Business Line, February 17) is welcome news. It may "improve corporate governance and capital adequacy and promote greater managerial autonomy". It could also lead to increased public participation. While encouraging mergers and acquisitions, the government has to ensure that there is proper expansion and that the rural areas are adequately covered so that the farm sector is served to the maximum limit possible. While expanding branches, initial losses should not be counted. It has to be compensated by gains in other areas. If required, services such as mobile banking could be introduced. The main problem in rural credit is not mere credit but the way in which it is spent. In providing credit facilities, banks or the government should be able to give proper advice and monitor the use of funds for various projects. There is a need to popularise banking facilities and make villagers account-holders. New type of accounts to suit their requirements could be considered. It is a two-way benefit: the villagers benefit from credit facilities, and the bank from commercial activities and increased fund mobilisation. A wider network of specialised ATMs suited to rural needs may make the spread of rural banking easier. A. Jacob Sahayam Thiruvananthapuram Finance Ministry clarifies The news item "Ministry proposes super regulator for financial sector" (Business Line, January 31) quotes from the Agenda Item for the meeting the Finance Minister had with the chief executive officers of the public sector banks on January 25, 2005. However, there is no proposal before the Government regarding a super regulator for financial services. Amitabh Verma Joint Secretary Ministry of Finance Dept. of Economic Affairs (Banking Division) New Delhi
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