Financial inclusion is not charity: RBI Deputy Governor

K C Chakrabarty says financial inclusion should be done as a viable business model

Reserve Bank Deputy Governor K C Chakrabarty has said banks cannot do financial inclusion as "charity" but only as a viable business model and for long- term survival achieving this is a must.

 

"Banks must not do financial inclusion as charity. They must do it as a viable business model. As you cannot remove poverty by charity, you can't also bring in financial inclusion by charity," Chakrabarty said in a micro-finance event here last night.

 

Pointing out that achieving financial inclusion is necessary for long-term survival of banks, he said, "Banks which neglect this business have no future say after a decade. Also, regulation will not permit you to do your banking without doing this financial inclusion."

 

Emphasising on the role of technology in achieving financial inclusion, he said, "We cannot take any product and services to the masses unless we have technology".

 

He also said new banks, which the RBI is in the process to give licenses, will play a major role in taking banking services to non-banked rural areas.

 

"We feel that there is a need for innovation, new business models for financial inclusion and that is why we are looking for new banks," Chakrabarty said, and pointed out that effective delivery model is yet to be evolved in the country.