Prime Minister Narendra Modi on Thursday asked the Reserve Bank of India (RBI) to draw up a 20-year roadmap aiming for full financial inclusion by 2035. Addressing a gathering of bankers and top officials on the occasion of the 80th anniversary of the RBI, Modi said that by then every household in the country should have access to at least some financial services, adding, “In the entire country, be it cooperative banks, microfinance institutions or nationalised banks, every institution must go ahead in one direction.”
Modi asked the central bank to identify milestone years for achieving the financial inclusion targets, indicating they could be 2019, the 150th birth anniversary of Mahatma Gandhi, or 2022, the 75th year of the country’s independence, 2025, the 90th anniversary of RBI and finally 2035, which would be the RBI’s centenary year.
“These are four important dates. We can create a roadmap for financial inclusion,” he said, adding that financial inclusion should not remain a government programme but should become “an article of faith”.
The RBI had flagged off financial inclusion in 2005 by highlighting the extent of un-banked regions in the country. Since then the RBI has turned the financial inclusion effort into a programme and prodded banks to participate by making changes in regulation as well as through public discourse.
The PM asked banks to be more accommodative towards small and marginal farmers while giving credit. “You will find that the problem of NPA (non-performing asset) you are facing now, you would not face a similar one while lending to them,” he said.
Modi’s comments come at a time when the RBI has proposed that a higher amount of loans be channelled to small and marginal farmers within banks’ mandated priority sector lending.
Lauding banks for the success of the government’s Jan Dhan Yojana, Modi said the success has given banks more confidence to embark on financial inclusion. More than 14 crore accounts have been opened under this scheme and 41% of these accounts have deposits that total Rs 14,000 crore, Modi added. He said banks should also reach out more to northeastern and eastern states, citing the abundance of natural resources there, and asked banks to encourage economic activity by giving easy access to credit.