This refers to 'PC to Banks: Loosen Up Please'(Economic Times, Aug 19).
Mr. Chidambaram's instructions to PSUs - to cut PLR and to mobilse money through ATMs should be greatly welcomed.This would be a marked departure and a significant change, from the air of negativity that we have been breathing through the couple of months.
Following the PSUs, host of major Private Banks are bound to slash Loan rates and increase Deposit rates. Increased mobilization of money through Deposit route and Disbursal through Loan route would give the wheel of economy, much needed gyration.But under rising Inflation rate and declining Per Capita Purchasing power, the needed investment momentum cannot be sustained alone from Metro disapora. Banks need to tap villages.
Hence one major agenda on the block would be, 'to Bank the Unbanked'. This is no more a subject of Financial Inclusion. Rather it makes an economic sense for the banks to cater to the semi-urban and rural segment due to their dominance in the population share and improving life style, owing to multiple rural schemes one them being MNREGA. Government additionally needs to provide some effective rural incentives to Banks (just as it did for industries in last few decades by setting up SEZs and giving exciting tax rebates) to ensure consistent and sustained efforts towards expansion into Rural Markets. So that banks go furthur from just Microfinance and Mobile-Banking.
That's an area Mr.FM would have to work on, apart from telling banks to double up ATMs and to setup cash collection machines.
Mr. Chidambaram's instructions to PSUs - to cut PLR and to mobilse money through ATMs should be greatly welcomed.This would be a marked departure and a significant change, from the air of negativity that we have been breathing through the couple of months.
Following the PSUs, host of major Private Banks are bound to slash Loan rates and increase Deposit rates. Increased mobilization of money through Deposit route and Disbursal through Loan route would give the wheel of economy, much needed gyration.But under rising Inflation rate and declining Per Capita Purchasing power, the needed investment momentum cannot be sustained alone from Metro disapora. Banks need to tap villages.
Hence one major agenda on the block would be, 'to Bank the Unbanked'. This is no more a subject of Financial Inclusion. Rather it makes an economic sense for the banks to cater to the semi-urban and rural segment due to their dominance in the population share and improving life style, owing to multiple rural schemes one them being MNREGA. Government additionally needs to provide some effective rural incentives to Banks (just as it did for industries in last few decades by setting up SEZs and giving exciting tax rebates) to ensure consistent and sustained efforts towards expansion into Rural Markets. So that banks go furthur from just Microfinance and Mobile-Banking.
That's an area Mr.FM would have to work on, apart from telling banks to double up ATMs and to setup cash collection machines.
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