Bring new law to set up banks for poor, says Mohd.Yunus

The government of India must bring changes in banking law or come out with new legislations to create banks for poor, Nobel laureate and founder of Bangladesh's Grameen Bank Muhammad Yunus said on Tuesday.

The existing banks within the current banking structure would not be able to serve the poor, he said.

"I have been asking the government to bring new laws to set up new banks. The existing law is to create bank for the rich. With existing structure, the banks will never be able to serve the poor," Yunus said.

"In order to bring financial services to the poor, a new legislation is required," he said at the Presidency University's 200th year celebrations here.

Yunus explained the new banking law should be such that it could incorporate banks serving poor people.

Many non-government organisations in India, which are dependent for financial assistance on donors, have been running large micro credit programme, he said.

"They require limited banking licence so that they can function as bank. The government has started giving new banking licence which is good," he said.

The Reserve Bank of India granted "in-principle" approval to 10 financial institutions to set up small finance banks under the "Guidelines for Licensing of Small Finance Banks in the private sector".

--IANS

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