The Reserve Bank of India wants financial intermediaries such as banks and non-banking finance companies to focus on a ‘3x3x3’ matrix so that small and marginal farmers, micro and small enterprises, and low-income earners in the unorganised sector are financially included.

Speaking at a BRICS workshop on financial inclusion, organised by the Indian Banks’ Association, SS Mundra, RBI Deputy Governor, said the credit-absorption capacity of small and marginal farmers needs to be enhanced.

Currently, farmers’ land holdings are fragmented and there should be some mechanism towards consolidation so that their credit absorption capacity goes up.

Since micro and small enterprises (MSEs) have little or no credit history, financial intermediaries have to make efforts to initiate people into the formal credit system, said Mundra. When it comes to low salary earners in the unorganised sector, the Deputy Governor felt that their skills need to be enhanced so that their earning capacity increases.

As small and marginal farmers generate adequate surplus, it is important that they be educated on investments.

Given that the MSEs generate low surplus, there is a need for greater financial literacy and awareness for this group.

The third group — low salary earners in the unorganised sector — generate no surplus. So, they have to be aided by basic savings accounts, basic term insurance and small savings for investments.

The third matrix — banks, NBFCs, MFIs, small finance banks and payment banks — has to ensure that people are using the services available to them.

Dormant accounts

Earlier, Minister of State for Finance Santosh Gangwar said that of the 241 million accounts opened so far under the Pradhan Mantri Jan Dhan Yojana, less than 25 per cent were dormant. Total deposits in these accounts amounted to ₹42,000 crore.

“There is a mission team which is monitoring these accounts to ensure that zero-balance accounts decrease to less than 20 per cent,” said Gangwar.

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