Pointing out that achieving financial inclusion is not a one-way traffic, Reserve Bank of India (RBI) deputy governor Dr KC Chakrabarty on Friday said that besides banks, other stakeholders need to pitch in to be able to effectively realise this goal.

“Our experience suggests that banks alone will not be able to achieve this unless an entire support system partners them in this (financial inclusion) mission. Only the support of policymakers, regulators, governments, IT solution providers, media and the public at large can bring about a decisive metamorphosis in our journey towards universal financial inclusion,” Chakrabarty said during a conference on financial inclusion.

Commenting on the importance of the FI objective, Chakrabarty said FI and inclusive growth are “no longer just policy choices but are policy imperatives”, and that it is on these factors that the long-term financial stability and sustainability of the economy depends. “The rich would not be able to sleep peacefully if the economic and social divide is allowed to grow any bigger,” he said.

In the last three years, 2.68 lakh banking outlets have been set up across villages till March 2013 compared to 67,694 banking outlets in villages in 2010. This marks a 295-percent increase, the RBI deputy governor said.

He added that around 109 million basic savings bank deposit accounts (BSBDAs) have been added to the 173 million existing accounts. Also, the percentage of information and communication technology (ICT)-based accounts to total BSBDAs has risen to 45 percent in March this year -- up from 25 percent in March 2010.

This, Chakrabarty said, was a significant improvement given the resource constraints and costs that banks have to incur, especially in such troubled economic times. But he reiterated that banks need to look at financial inclusion as a “viable business proposition, rather than as a corporate social responsibility or a regulatory obligation”.

Charting out the new FI plan for the next three years (2013-2016), Chakrabarty advised banks to encourage their branches to come up with new ideas and strategies for smoother implementation. “The disaggregation of the plans is being done with a view to ensure involvement of bank staff across the hierarchy in the FI efforts and also to ensure uniformity in the reporting structure under the financial inclusion plan,” he said.

He also said banks have now started focussing on the volume of transactions in these accounts instead of merely concentrating on the number of accounts being opened.

Highlighting measures taken up by RBI to facilitate banks to achieve their financial inclusion targets, Chakrabarty said banks now don’t require the banking regulator’s nod for opening branches in areas with population below 1 lakh. Besides, KYC norms have been simplified for small accounts by allowing Aadhaar cards to be used as proof.

Specifying that RBI has given all banks a timeframe for the next three years by which banking services must be accessible in all unbanked villages, he said financial literacy is an important tool that can be used to achieve this goal.