In 2010, RBI Governor Duvvuri Subbarao and
Deputy Governor Kamalesh Chandra Chakrabarty had taken bankers head on when the
latter adopted the stance that financial inclusion is unviable. “Commerce for the poor is always more viable,
more profitable than commerce for the rich.” Mr
Chakrabarty is quoted as saying.
What is it
that makes Indian banks shy away from extending technology to rural markets and
capitalizing on vast untapped potential of rural India? With 70% of India’s
population living in villages and these households having growing incomes,
corporate should make a beeline to stroke demand for consumer goods specially
jeeps, scooters, televisions, fans and even washing machines. There is also an
increasing market for cosmetics and mobiles and with multi-brand retail
channelizing over Rs 400 billion, it will surely be boom time for the rural
populace.
In this
scenario, banks can project themselves as facilitators and project an image of
being caring, much like a family member by initiating jatras and forums to
educate about thrift, saving, availing loans for education and building small
enterprises; establishing kiosks so that even the semi-literate farmer gets a
feel and convenience of an ATM. In one such programme, Syndicate Bank adopted a
poor locality in Hyderabad and mobilized 2,000 new savings accounts.
At the
other extreme, social control of interest rates on loans less than Rs 2 lakh,
renders financial services to micro-clients uneconomical and hinders financial
inclusion. Another factor for serious
consideration is whether co-operative banks are fulfilling the lacuna? Probably
a common accounting system without external influence and audit procedures will
help to provide the much-needed co-operative credit reform. While few reforms
have led to diversification of financial services, rural banking yet, till date
continues to receive step- motherly treatment from the banking industry.
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