Financial outreach plan is key for new bank licence, says Subbarao
NEW DELHI, MARCH 4:
The Reserve Bank of India today said that financial inclusion plan will be an important criteria for getting new banking licences in the private sector.
The RBI came out with new banking licence guidelines last month wherein it said the important criteria for processing the application would be the business model of the applicants and it should provide for financial inclusion.
“We have also said that new banks are required to establish at least 25 per cent, a quarter, of their branches in places with less than 10,000 population...
“I do hope that the new bank applicants indeed everybody interested in financial inclusion will come up with innovative and imaginative ideas,” RBI Governor D Subbarao said at an event here.
As per the guidelines, the interested entities would have to send in their applications by July 1, 2013.
As per the new norms, the RBI has prescribed private corporates and public sector entities with 10 years experience to be eligible to apply for new licence. The initial paid-up capital for new banks has been set at Rs 500 crore.
Financial literacy
Subbarao said: “A part, indeed an important part of the mandate of central banks is financial stability and an essential prerequisite for financial stability is financial literacy and the central bank has a unique leverage in providing financial literacy.’’
Listing the various challenges for financial inclusion, Subbarao said a liberalised Know Your Customer (KYC) norm and having the unique identity number would help simplify the process.
He said banks still see financial inclusion as an obligation and not as business opportunity and hence the reach of inclusion was less.
He has asked banks to take up financial inclusion as a business opportunity to help poor come under the banking operation.
At least 8% growth needed to tackle poverty: RBI’s Chakrabarty
NEW DELHI, MARCH 4:
India should grow by at least 8 per cent year-on-year to make some meaningful dent on poverty, RBI Deputy Governor K.C. Chakrabarty has said.
Unless the country grows by at least 8 per cent, it will not survive,
Chakrabarty told Business Lineon the sidelines of India-OECD-World Bank regional conference on financial education here today.
He was responding to a query on whether 5-6 per cent GDP growth will be a new normal for India.
The Central Statistics Office (CSO) had recently pegged the advance estimate for GDP growth for 2012-13 at 5 per cent, lower than the 5.5 per cent estimate put out by the Reserve Bank of India.
Chakrabarty has in a way echoed the views of RBI Governor D. Subbarao, who on Sunday said that a growth rate of 5-6 per cent is not sufficient for the Indian economy. Subbarao had said that India has the potential to grow at double-digit growth rate provided some issues are addressed.
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