Financial Inclusion- News and Views - January 2014
We begin the year with a comprehensive overview of the status of financial inclusion in India and the challenges ahead, through two lead stories: a) a speech by Shri P. Vijaya Bhaskar, ED, RBI, that evaluates the process of inclusion in India and brings out precise issues for each stakeholder, and b) the annual survey by CGAP and College of Agricultural Banking that assesses the performance of customer service points or banking agents in India, an update from the field over the results from 2012.
In this speech, Shri P. Vijaya Bhaskar, Executive Director, RBI, has put together data from various sources to highlight the status of financial inclusion in India. Though there has been an overall improvement in terms of critical parameters such as bank branch penetration, deposit penetration and credit penetration, India still lags behind globally on these parameters. He also specifies the list of issues stakeholder-wise. For instance, the need to adequately compensate the banking agents, increase support and training by banks, enhancing ATM networks in rural and unbanked areas etc.
The national survey of banking agents or customer service points (CSPs) was conducted for the first time in 2012 by CGAP and the College of Agricultural Banking. The results from the 2013 survey released recently bring out the major issues that plague the performance of CSPs, while showing that the conditions of CSPs have worsened over the year. For instance, while the number of CSPs has increased, there been no increase in the average number of daily transactions. Moreover, 16% of all surveyed CSPs had never transacted, while this share was just 5% in 2012. While those agents giving government payments perform better than others on a number of parameters, most CSPs have been put in place to meet financial inclusion targets and the majority are still not linked to G2P delivery.
Section I: Policy – the latest from India’s policymakers
The Indicus Centre for Financial Inclusion was launched in 2011 to distil and disseminate information on accelerating the poor’s access to high-quality financial services. The Centre is supported by the Bill & Melinda Gates Foundation. http://www.indicus.net/icfi