The Finance Minister, Mr. Pranab Mukherjee has strictly asked banks to carve out plans and strategies that aim at the unprivileged and under privileged segments of population.
The State Bank of India (SBI), in this context, has sanctioned a term loan worth Rs. 200 crore to Hyderabad based microfinance corporation Share Microfin Ltd.
The Finance Minister has urged that the banks need to harness technology and also innovate on low cost business models with the aim of reaching out to as many as 6,00,000 villages across the country. Marking the financial inclusion drive, Mr. Mukherjee has laid foundation of a bank note paper mill in Mysore.
RBI Governor, Subbarao has said that the lead banks in each district have been asked to draw a road map of those villages having population of 2000 or more so that these villages have access to the banking platform. The road map has to be carved out by this month's (March) end so as to fulfill the mission o financial inclusion.
"All domestic, public and private sector commercial banks have agreed to come up with their specific, board approved financial inclusion plans (FIPs) by March 2010 to be rolled out over the next three years. These plans will have both qualitative and quantitative milestones," said Subbarao.
"We need to study the link between financial literacy and financial inclusion and improved financial outcomes so as to understand which models have been effective," Subbarao added.
"In this context, it will be useful to study successful experiments from NGOs (non-governmental organisations) such as Sewa (self-employed women's association), which started a financial counseling training service for poor self-employed women, including a training for trainers," Subba Rao further quoted.
Banks have further been asked to mark financial literacy as well as financial inclusion as criteria for performance evaluation of their staff. Stressing on technology upgradation, Subbarao said technology could bridge distances for those living in rural and remote communities.