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When Nachiket Mor – a board member of Reserve Bank of India (RBI) – released his report on comprehensive financial services for small businesses and low income households in January – it was greeted with scepticism.
The former deputy managing director of ICICI Bank is known for his radical ideas but often criticised for being high on theory and low on practical value.The committee headed by Mor created to draw the blueprint to foster financial inclusion faced criticism not only from several experts but also from the government.
The Mor panel envisages each Indian above the age of 18 years having a full-service, safe and secure electronic bank account by January 2016. This timeline of the proposal was however disputed and termed as ‘pressing ’by two committee members of the panel headed by Mor.
The panel report had a dissent note from the two committee members- Shikha Sharma, CEO & MD of Axis Bank and SS Mundra, CMD of Bank of Baroda and now deputy governor of RBI- with their comment saying, "Looking at the enormity of the task, more particularly in low density rural areas, and the need of supporting physical as well as virtual infrastructure vis-à-vis their present state, the timeline looks pressing". They suggested January 2018 as a more "realistic and implementable" target date.
But of course, the Narendra Modi-led NDA government thought otherwise.
He launched Jan Dhan Yojana on 28 August amid much fanfare. The Yojana entails opening bank accounts for 75 million families by January 26, celebrated annually as Republic Day, next year. Modi has sweetened the offer with other benefits like debit card and insurance cover for those opening bank accounts before January 26, 2015. The government claimed 15 million accounts and a similar number of accident insurance policies in a single day.
However, it is not the first time that politicians have piggybacked on RBI’s financial inclusion drive.
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The central bank started its financial drive through the banking sector in 2009 and the lenders were given a target to open branches in unbanked rural areas (with a population of less than 2000) during the first phase between 2010 and 2013. About 7,400 rural branches were opened during this period. The second phase is between 2013 to 2016 in which banks have been asked to be present in all the unbanked locations of the country.
Finance Ministers of the previous UPA government have also ensured they have a say on financial inclusion. Calling in public sector bankers to review the progress was a routine effort. Financial inclusion was always on the agenda in the quarterly performance review of government banks.
