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The Reserve Bank of India should listen to the unheard voices of the poor in monetary policy decisions, according to its former governor D. Subbarao.
He was delivering the fifth foundation day lecture on RBI making a difference to everyday lives at the Icfai Foundation for Higher Education here on Friday.
Referring to the recurring criticism that RBI was following a high interest rate regime in the post-global financial crisis to tame inflation, he said it was also important to keep the poor peoples' concern over price-rise.
"Inflation in economics is also called regressive tax as it hurts poor people more," Subbarao, who served as RBI Governor during 2008-13, said.
Financial inclusion was important to provide opportunities to the poor.
Banks were seeing financial inclusion more as an obligation than opportunity. “But there is a fortune at the bottom of the pyramid. RBI and Govt should design a proper incentive structure for banks,” he added.
The know-your-customer norms and streamlining of the banking correspondent system were also challenges in financial inclusion, Subbarao said.
The lecture was organised to mark the birth anniversary of late N J Yasaswi who founded the Icfai group in 1985.
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