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Chennai, June 12

A discussion paper put out by a Technical group of the Department of Payment and Settlement Systems of the Reserve Bank of India has recommended financial incentives to increase the use of satellite connectivity in facilitating penetration of banking services.

Of the 611 districts in the country, 375 districts are under-banked. About 54 of these districts are in the North-eastern region of the country. These are not very well connected even by terrestrial links. With a view to getting over the limitations of the terrain as well as to serve as a back-up system, the technical group has recommended that banks consider the satellite route for connectivity of branches. The group has suggested that the RBI may provide incentives for lease rentals of VSAT terminals (up to 100 per cent in the case of branches in the North-East; up to 75 per cent in other under-banked districts in rural areas and up to 50 per cent in the case of under-banked districts in semi-urban areas). –

Our Bureau

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