The Reserve Bank of India (RBI) is considering to liberalise the existing norms for the operational area of a bank?s branch. The aim is to ensure financial inclusion at all banks across the country. According to current norms, a branch cannot operate in an area beyond a 15-km radius.
The issue is likely to come up during the next quarterly meeting of state-level bankers? committee, which would be held in Pune on Wednesday. In case the plan is implemented, it will help those private sector banks which do not have big presence in the remote parts of the country unlike their peers in the state-run lenders.
An RBI official on condition of anonymity said on the sidelines of a conference on SME in Mumbai on Tuesday that ICICI Bank had requested the RBI to provide some relaxation in the existing norms and added that the issue would be discussed during the SLBC meeting to be held on Wednesday.
Blessed with the advanced technology, ICICI Bank has got the ability to show transaction within 48 hours and hence the relaxation in norms will help the bank achieve its target of financial inclusion faster. Representatives of various banks active in the state will be attending the SLBC meeting. Bank of Maharashtra is the lead bank for the state of Maharashtra. Some 20 districts of the state are likely to achieve financial inclusion by June 2009, whereas the remaining 12 districts would be covered under the financial inclusion programme by December 2009.
The official said that almost one district in each state of the country has already achieved the financial inclusion target. Now we are looking at bringing more districts under the programme, said the official. Some of the states which have achieved financial inclusion include Goa, Himachal Pradesh and Puducherry.
Coming on lending to MSME sector, the official said that we want to provide credit up to Rs 1 crore to the sector. Right now, Sidbi is already providing loans to the MSME sector through credit guarantee scheme up to Rs 75 lakh which can easily stretched up to Rs 1 crore.
Also, it was in accordance with the report submitted by the Chakrabarty committee. However, the file in this connection is pending with the Prime Minister, who also happens to be the finance minister.