Avoid arbitrary pricing of banking products & services, says RBI’s Chakrabarty

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K.C. Chakrabarty, Deputy Governor, RBI.
K.C. Chakrabarty, Deputy Governor, RBI.

The Reserve Bank of India is prodding banks to pursue the twin objectives of enhancing financial literacy and achieving financial inclusion.

This will help bring the marginalised sections of society to the mainstream, said K.C. Chakrabarty Deputy Governor RBI.

Banking services have to be made available close to where the individual needs them, at prices he can afford, and in a transparent manner, he said, while speaking on ‘Banking as a Fundamental Right of People’ at the 27{+t}{+h} National Conference of All-India Bank Employees Association here.

He pointed out that the financial inclusion efforts have not achieved the desired results despite the banking system being in existence for more than 200 years and several banks credited with more than 100 years of service.

Considering the widespread exclusion of people from financial mainstream, the RBI in 2005 launched a drive to extend banking services to all inhabitations in the country.

Banking services are now available in over two lakh villages, but about four lakh villages still have no access to the services. Banking services can be extended to un-banked centres in both rural and urban areas by leveraging on technology, he added.

Arbitrary pricing of banking products and services must be avoided to bring these within the reach of the common man, he emphasised.

He said that employee associations have a pivotal role in instilling a sense of commitment and help make available banking services at customers’ doorsteps.

Victor Louis Anthuvan, a Chennai-based economist, underlined the need to bring back to India some $450 billion of unaccounted money stashed away in tax havens.

Coming down heavily on the taxation policies, he wanted a complete restructuring of the policies taking away unnecessary and unreasonable exemptions and concessions.

P. Sainath, Rural Affairs Editor, The Hindu, said that only by extending banking services can the agricultural sector be rescued from collapsing.

Agricultural loans are not reaching the right hands. Farmers also fall victims to the prevailing credit system, he said.

(This article was published on February 11, 2013)
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