Financial inclusion – A reality check by the RBI top brass

Financial inclusion is something that the banking regulator wants. Top bankers at commercial banks take the cue and set targets for their underlings.

Yet, ground level implementation of this agenda remains an unfinished challenge. Enthusiasm for such projects which involve a large part of the local branch manager's time is a problem.

Even where customers are a trifle better organised under the aegis of a self-help group, there is not much difference.

Branch managers tend to adopt delaying tactics while opening ‘no frills' savings accounts, knowing that they don't contribute much to their deposits/advances or bottomline immediately.

Even when branch managers are well-meaning and sincere, there are other issues. For instance, the processing of papers involving ‘know your customer' norms involves delay.

And often that happens for as simple a reason as photos of customers not getting affixed. Why? Because villages have no photographers in the immediate vicinity!

Sometimes, when banks do have the requisite infrastructure, there is a servicing issue. It takes a couple of weeks to get spare parts/ replacements of essential items in rural branches. Some times the servicing vendor doesn't have the wherewithal to discover immediately where the problem is – whether it is with the machines or it is with satellite connectivity. Sometimes there are technical issues such as the fingerprint scanner not being able to decipher the prints of older persons.

These and a number of similar problems came up at a frontline managers' conference on financial inclusion at Pune last Friday. It was a reality check for the RBI Governor, Dr D.Subbarao, and his top team who listened to customers, self-help groups and branch managers voice their problems.

The Governor wondered whether banks considered ‘no frills' accounts a nuisance and closely questioned individual branch managers about this. Urging them to speak frankly, he added, “We didn't invite chairmen and managing directors of your banks, so that you can speak frankly.”

At the end of it, one asked Dr K.C.Chakraborty, Deputy Governor, RBI, whether he was surprised by anything he had heard. Conceding that a lot of it was familiar ground, he said banks need to find innovative solutions. If they don't, they will have to fight with other banks that do. “I have been saying we need 200 more banks,” he said.

COMMENT NOW