Avoid risk in financial inclusion aim, Gokarn tells banks

Reserve Bank of India (RBI) Deputy Governor Subir Gokarn on Monday said it needs to be ensured that banks do not take “undue risks” to meet the aimed financial inclusion.

“We have to try and ensure that this (financial inclusion) does not result in a disproportionate increase in the riskiness of banks’ balance sheets. As we go along, we need to try and make sure that this expansion is not resulting in undue risk. We need to ensure that banks are protected,” Gokarn said on the sidelines of the central bank’s outreach programme here.

Underscoring the importance of inclusive growth in the sector, Gokarn said, financial inclusion will be a key criterion for issuing new bank licences. As part of its platinum jubilee celebrations, RBI’s top officials are visiting non-urban areas to promote financial inclusion and spread awareness on banking.

The central bank’s outreach programme aims to evolve a sustainable banking model at the village level.