fast forwarding >>> financial inclusion

8/12/2019 Fast Forwarding >>> Financial Inclusion

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Fast forward>> Financial Inclusion and Deepening? 2014

1 Manoj Rawat | Head Agribusiness RBL Bank, Mumbai | [email protected]

Manoj Rawat, Head- AgribusinessRBL Bank, [email protected]

Fast forward>> Financial Inclusion and Deepening

What the need now is to draw an elaborate yet granular implementation plan spread over arealistic time frame?In brief the terms of committee on Comprehensive Financial Services for Small Businesses andLow Income Household (popularly known as Mor Committee) was to frame and articulate a clearand detailed vision for financial inclusion and financial deepening in India, establish a set of designprinciples; and to address the specific barriers to ensure full achievement of the vision. The reportpacks a lot of recommendations for fast forwarding financial inclusion and financial deepening.Few observations

1. Broad philosophy and Larger Financial Sector reforms

The report provides a larger philosophy, gives good ideas which are thought provoking andenvisages a fast forward approach to inclusion.

While the report has presented an ambitious plan, it seems has also tried to sugge st a largeragenda of financial sector reforms in the country.

2. Financial Inclusion Obligation versus Opportunity

The biggest push that needs to be made is to ensure that Financial Inclusion & FinancialDeepening is seen by all the stakeholders especially the Financial Institutions as a Commerciallyviable proposition rather than regulator driven obligation.

3. Have we again propelled across Ideas?

Interestingly and rightly so the report notes that As one examines the financial inclusion landscapein India, the sheer energy that has been put behind the effort and the seriousness with whichproviders and regulators have pursued this goal is impressive. However, it is possible that it is thisvery energy that has been its key weakness as well, because it has propelled highly engagedregulators and policy makers to move from one big idea to another, each time convinced that theyhave finally found the key to financial inclusion, whether it be cooperative banks, nationalisation ofbanks, self-help groups , regional rural banks, or business correspondents. Does this report and recommendation will also propel the policy makers to move from earlier bigideas to newer ideas or provide a comprehensive framework which includes existing policiesand new ide as to address the barriers?

4. Robust and micro implementation plan will be key?

The report has not made elaborate discussion on how this is going to be implemented and whatkind of elaborate and granular plans financial institutions will need to do make this happen swiftlyin line with articulated vision


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Some of the challenges- Need for granular planning1. Universalization of bank Accounts

Committees proposal for universalization of bank accounts by January 1, 2016 with the

Aadhaar as the prime driver, is certainly a good idea but for this to work we will need toaddress few of the following.

a. Aadhaar as single identity to be free of g litches and should have legislativeapproval

b. Poor seeding of Aadhaar numbers into bank accounts (


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these facts and ignores to genuinely take care of the interests of agriculture and of the small& marginal f armers, may never deliver the real Inclusion.

A sound financial inclusion policy primarily needs to primarily focus on increasingproductivity, viability and bringing lasting improvement in the economic condition of the

small, marginal and tenant farmers and sharecroppers and wagers. We may need to realignthe framework to focus on this?

6. Multiplicity of policy frameworks

Multiplicity of policies and frameworks without addressing the target segment in a veryfocused manner may not yield the desired results. Else it will remain an unfinished processor turn into an "on the paper inclusion". There is need realign some of the policies or evendovetail the various policies aspiring to achieve "inclusive growth" for our country? Thismay surely be a step forward to achieve true & lasting financial inclusion and maycontribute to creation sustainable food and nutritional security for the country.

While there are quite a few areas which needs to addressed especially from implementationpoint of view and creating synergy amongst the various policies and institutions, the MorCommittee on Comprehensive Financial Services for Small Businesses and Low IncomeHousehold has put forth many forward looking ideas. Implementation remains the key.

Manoj Rawat ----------------------------------------------------------------------------------The views expressed in this article are purely personal.Email: [email protected] | Blog : http://mkrawat.blogspot.com
mailto:[email protected]:[email protected]

fast forwarding >>> financial inclusion

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