Prime Minister Narendra Modi asked the Reserve Bank of India (RBI) on Thursday to prepare a 20-year roadmap on financial inclusion to mark its 100th anniversary in 2035, and said geographical inclusion must also be addressed to bridge the east-west divide.
“Why don’t you have a target for 100 years – to reach banking services and beyond to each and every household?” the prime minister posed at an event here to mark 80 years of India’s central bank, which was established on April 1, 1935.
“Eighty years is an important event for us in India,” he said, adding that it marks the witnessing of 1,000 full moons during that time. “I’m sure when you celebrate your 100th anniversary 20 years from now, you would not have disappointed the country.”
He said the other milestones for financial inclusion could be the 150th birth anniversary of Mahatma Gandhi in 2019, the 75th year of Indian Independence in 2022, and the RBI’s own 90th anniversary in 2025.
With Maharashtra Governor Vidyasagar Rao, Chief Minister Devendra Fadnavis, Finance Minister Arun Jaitley and RBI Governor Raghuram Rajam at the dais, the prime minister also spoke about how the poor can actually give back with financial inclusion.
“Out of the 14 crore bank accounts opened under the Prime Minister’s Jan Dhan Scheme, 41 percent did not open it for free,” the prime minister said, adding that as much as Rs.14,000 crore was collected from such accounts.
“Banks must have seen the poverty of the rich, but you have not seen the richness of the poor,” he said, alluding to the beeline that the corporate sector makes to banks, even as the poor, who need credit the most, are deprived.
Modi also expressed concern over the the east-west divide and said while there was perceivable development in the western states of the country, those in the vast east were still struggling, despite being endowed with the maximum resources.
“We talk of financial inclusion. We should also look at geographical inclusion.”
The prime minister also expressed concern over the suicides committed by farmers and said their pitiable plight was something that the financial sector in India must address.
“The pain of this should not only be restricted to newspapers and TVs. When a farmer commits suicide, it should make the banking sector look up and think. By taking money from a lender, the farmer has to resort to these steps.”
In the past few weeks, there has been a debate over whether or not the government and the central bank were on the same page in addressing issues that concerned the country’s financial system and health.
But Modi sought to allay such apprehensions over lack of sync.
“I meet Raghuram (RBI governor) every two months. Each time he comes to me with just four slides. These explain very clearly what the thinking is and I am able to understand it clearly,” the prime minister.
“Would this be possible unless the government and RBI are on the same page?”
Finance Minister Jaitley said the Jan Dhan scheme was a tremendous success and that the banking sector must now gear up to its second phase – that of providing a longer and meaningful social security net.
The challenge, he said, would be or account holders to get insurance cover for accidents and death, as also an alternative pension scheme with the support from the government, banking systems and other institutions.