The Hindu Business Line : In defence of track record

In what seemed like a studied response to the Finance Minister's plea for more lending to poor, in his keynote address in the morning, bankers provided a strong defence of their track record at the first session on `Inclusive growth of banks'.

Chairing the session, Mr M.B.N. Rao, Chairman and Managing Director of Canara Bank, said banks had been practising financial inclusion since 1969.

`Silent soldiers'

He said that they had done this by extending their branch network to rural areas, going to the neglected areas of the north-east parts of the country, setting aside five per cent of loans for women and having facilities for minorities, implementing the IRDP programme and extending educational loans, besides introducing no-frills accounts recently. He said that banks had functioned as "silent soldiers''.

In his presentation, Mr M. Balachandran, Chairman and Managing Director, Bank of India, suggested that the Government involve itself directly in the funding of self-help groups. It cost about Rs 8,000 per SHG to stabilise its financial strength.

He said banks found it difficult to bear this expense and suggested that for the Government, this would involve an outlay of less than one per cent of the budget expenditure for rural development.

Vision unveiled

Ms Chanda Kochhar, Deputy Managing Director, ICICI Bank, unveiling her bank's vision for "inclusive growth'' said the bank was trying to follow a hybrid strategy of using different channels such as ATMs, credit access points, kiosks, micro finance institutions and post office channels to reach out to the rural population.

The aim is to have a delivery point within 10 km for the customer, anywhere across the country.

She said that the bank hoped to create and incubate 200 micro finance institutions by 2010 (it had already created 65 MFIs), which would cover three districts each.

The aim is to cover 600 districts, 30,000 villages and reach 25 million clients and touch 100 million lives.

Ms Naina Lal Kidwai, Chief Executive Officer, HSBC, said the biggest concern in delivering inclusive growth was technology, but lack of vision among bankers is a problem right now.

She said the cost of financial intermediation was one of the highest in India and there is need to reduce the gap.

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