The Hindu Business Line : Financial inclusion: RBI for external evaluation

Mumbai, Sept. 12 The Reserve Bank of India plans to appoint external agencies to assess the success of States that have achieved 100 per cent financial inclusion.

Mr V. Das, Executive Director, RBI, said that so far Himachal Pradesh and the Union Territory of Puducherry have achieved 100 per cent financial inclusion.

“We measure financial inclusion by looking at whether a household has at least one member with a bank account. By hiring an external agency, we want to have an impartial check on the quality of coverage,” Mr Das said.

He was speaking on the sidelines of a banking seminar organised by FICCI and the Indian Banks Association.

The RBI plans to hire agencies like the National Institute of Banking Management (NIBM) and the IIMs for an impartial study.

Mr Das said that States such as Gujarat, Kerala and Karnataka have made rapid progress and could achieve complete financial inclusion in a year.

However, Bihar, Chhattisgarh, Uttarakhand, Jharkhand and the North-Eastern States need to work harder in this regard, he added.

The Central bank will be collaborating with the State Governments to work on the extension of banking services.

Mr Das said that there is a need to sensitise branch managers about financial inclusion.

“There has to be inspirational leadership and a change in mindset. Otherwise, me may not be able to deliver services at the grassroots level.”

On financial literacy, Mr Das said that the RBI has created comic strips in different regional languages and Braille to educate the common man, particularly children, about basic financial concepts.

The Web site of the Central bank will also have a link for the public.

Mr Tilman Ehrback, Partner, McKinsey and Co, said that the barriers to scaling up banking services in India include high transaction costs as well as lack of human capital, funding, adequate infrastructure and technology.

Analysts said that around 60 per cent of the country’s population remain without access to formal credit.

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