RBI yet to take call on Mor committee on financial inclusion

Proposes simplified KYC procedures for poor

geetanjali

Geetanjali Minhas | February 12, 2014



Admitting that financial inclusion is a tall order for the country, Reserve Bank of India (RBI) governor Raghuram Rajan, however, did not commit on implementation of Nachiket Mor committee. Last month, the committee gave slew of measures on boosting the financial inclusion.

The central bank is yet to take a call on implementation of the Mor panel, he said on the sidelines of the Nasscom India Leadership Forum 2014 in Mumbai on Wednesday.

On the question of the Mor committee’s recommendation on ‘payment banks’, the RBI governor said, “At this point there is no decision to move forward. We will look at it in great detail, including what value it brings, the viability as well as whether it presents arbitrage opportunities vis-a-vis the schedule commercial banks.” The Mor committee suggested about setting up of ‘payment banks’ with an initial capital of Rs 50 crore, whose purpose was to deepen access of finance, especially in the case of small businesses.

Mor panel had earlier recommended for a bank extension within 15 minute walking distance for a citizen across the country.

However, Rajan admitted that much needs to be done in reaching to the unbanked areas of the country. He advocated easing of know your customer (KYC) norms. “It is very essential to get the poor to put aside some money no matter how difficult it is. The KYC, norms is a regulatory requirement however experts have suggested minimising these requirements as today stringent KYC norms are keeping many out of the banking fold,” said RBI governor.

Rajan also proposed standardised and simplified procedures for registration and authentication of customers for mobile banking services and creating awareness programmes across banks for generating customer services along with SMS services and USB technology. The RBI governor also added that the regulatory mechanism for mobile base and expansion is already in place.

On virtual currencies, he underlined concern about the alternative currencies like Bitcoins. “As a currency I do worry a little bit when the underlying values fluctuate tremendously. One of the values of a currency is stability. Who will maintain value - can we have confidence in an unseen, unknown centre which will maintain the value of the currency or an algorithm which will maintain the value of the currency,” Rajan said.

He added that RBI is currently studying the issue and will come out with a "considered view" on it soon.

Comments

 

Other News

AI: Code, Control, Conquer

India today stands at a critical juncture in the area of artificial intelligence. While the country is among the fastest adopters of AI in the world, it remains heavily reliant on technologies developed elsewhere. This paradox, experts warn, cannot persist if India seeks technological sovereignty.

RBI pauses to assess inflation risks, policy transmission

The Reserve Bank of India (RBI) has begun the new fiscal year with a calibrated pause, keeping the repo rate unchanged at 5.25 per cent in its April Monetary Policy Committee (MPC) meeting. The decision, taken unanimously, reflects a shift from aggressive policy action to cautious observation after a signi

New pathways for tourism growth

Traditionally, India’s tourism policy has been based on three main components: the number of visitors, building tourist attractions and providing facilities for tourists. Due to the increase in climate-related issues and environmental destruction that occurred over previous years, policymakers have b

Is the US a superpower anymore?

On April 8, hours after warning that “a whole civilisation will die tonight,” US president Donald Trump, exhibiting his unique style of retreating from high-voltage brinkmanship, announced that he agreed to a two-week ceasefire with Iran. The weekend talks in Islamabad have failed and the futur

Machines communicate, humans connect

There is a moment every event professional knows—the kind that arrives without warning, usually an hour before the curtain rises. Months of meticulous planning are in place. And then comes the call: “We’ll also need a projector. For the slides.”   No email

Why India is entering a ‘stagflation lite’ phase

India’s macroeconomic narrative is quietly shifting—from a rare “Goldilocks” equilibrium of stable growth and contained inflation to a more fragile phase where external shocks are beginning to dominate domestic policy outcomes. The numbers still look reassuring at first glance: GDP


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter