Excerpts from the discussion:

Mr. Sreenivas Kunte, Director, CFA Institute, India

Mr. Sreenivas Kunte said that out of the 17.5 crore bank accounts opened through Pradhan Mantri Jan Dhan Yojana, 46.1% have zero balance. This shows that merely opening a bank account does not help in achieving financial inclusion. He further said that to achieve financial inclusion we need to come up with innovative and far reaching methods. He also put forward his point about the utilization of self-help group, which could make a significant change in achieving the target. Self-help groups have deeper penetration than others. This sector is unorganized, but could be utilized. At last, he said that we have a long way to go, but the government and RBI’s initiatives are rigorous. Payment banks could drastically change the way we see the banking. It could also be a key factor in achieving financial inclusion.

Mr. Rajarshi Banerjee, Vice President, Axis Bank

Mr. Rajarshi Banerjee started off by comparing the financial inclusion models that were earlier in practice to the ones which are in use at present. He spoke about the fact that rural areas are still cash intensive and hence there is a need of financial literacy to educate them about the value of bank accounts. Further, he sighted the lack of infrastructure which acts as a barrier to financial inclusion. He spoke about the lack of communication networks in rural areas which act as hindrances to mobile banking facilities that the Government has planned to offer. To end with, he spoke about the fact that the financial inclusion schemes must have commercial feasibility so that banks are encouraged to support the opening up of accounts for the rural public. He also said that mindsets need to be changed to promote cashless banking and that people need to be made aware of the benefits of technology.

Mr. J. K. Vishwanath, Chief Credit Officer, Development Credit Bank Ltd.

Mr. J. K. Vishwanath joined in the discussion on financial inclusion by explaining what it means and the broader objectives of it like inculcating a habit of saving among people, lending money to people, who do not have access to finance, at reasonable rate and insurance. He stressed on the fact that its’ not only about the number of accounts being opened and that a lot has to be done to push these people to progress higher so that they can enjoy other benefits such as insurance and credit. Taking the discussion further, Mr. Vishwanath talked about the newly emerging ‘payment banks’ and how they will help create good credit history. Lastly, he emphasized the importance of bank-customer relationship. Technology alone cannot build trust among the customers. Banks need to provide more reliable means of access to their products and should build trust among their customers.

Mr. Saurav Mishra, Vice President, Deutsche Bank

Mr. Saurav Mishra spoke about the concept of financial inclusion in other countries where it covers a broader perspective of lending to weaker sections of the society who have no access to lending, credit or insurance policies. He said that financial inclusion is just the start of the journey of providing simple access to credit and insurance. Practices of lending to SME’s and agricultural sectors have been there since ages. When it comes to India, factors such as population size, financial literacy and infrastructure need to be looked at very seriously. He also said that for daily wage earners, it is not the deposit of money that matters, how much he spends and where he spends matters most. To end with, he said that the major challenge is to reduce cash transactions and facilities such as Direct Benefit Transfers need to be taken more seriously.

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