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.