Implementation of RBI guidelines key for financial inclusion | SupportBiz

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Implementation of RBI guidelines key for financial inclusion

Financial inclusion is a journey which the Indian banking industry has started. Like any other journey, this one too is fraught with challenges and limitations, and needs a roadmap to achieve its goal.

Deepak Singhal, Regional Director, Reserve Bank of India, discussed this and more in an exclusive interaction with SupportBiz.

Singhal highlighted the  key  gaps in financial inclusion in India, and the steps needed to fill up these gaps.  

Edited excerpts from the interview:

With regards to financial inclusion, what must be the key point of focus for the industry?

RBI guidelines  on this have been made very clear.  However, the implementation part is something which needs to be streamlined. I must say that the implantation of RBI’s guidelines for financial inclusion has been poor so far. However, banking organizations are seriously working towards the goal of financial inclusion, and a lot of emphasis is being laid  on this.

What are the key elements of financial inclusion?

For the overall efficiency of financial inclusion, there are four critical elements required. Firstly,  affordability must be ensured in case of all  financial products. Then, the factor of reliability comes in, which means that banks need to ensure credibility for their products among  common people. Thirdly, the availability aspect  is very important. To facilitate all of this, the  awareness factor cannot be ignored.

Financial inclusion cannot happen unless savings happen. Financial inclusion is based upon both supply and demand. By opening an account you can create supply, but there has to be demand as well. That can  happen only by increasing awareness.

What are the gaps in the mission of achieving financial inclusion?

As we know,  India is a vast country, where banks have a presence in 36,000  villages. We do not want every single individual to open a bank account, but we want to have a strong level of awareness among  people. We need to make optimum usage  of the efficiency of existing bank branches. Banks must come up with simple financial products, which can attract  common people.