Mukerjee urges banks to reach out to ignored segments

Finance Minister Pranab Mukherjee urged bankers to extend loans and other facilities to un-reached and under-reached segments of the population.

Inaugurating the two-day workshop on financial literacy, organised by the Reserve Bank of India (RBI) and the Organisation for Economic Cooperation and Development (OECD), the finance minister said the bankers have to change their mindset and approach.

''We need new approaches to financial inclusion that build on the lessons of the past. This requires a change in the mindset of policymakers, practitioners and other stakeholders to reach out the hitherto un-reached and under-reached segments of our population,''. Mukherjee said.

The minister said the financial literacy had also been linked to saving behaviour and portfolio choice, often connecting financial knowledge to one specific type of transaction.

The Reserve Bank of India (RBI) governor D Subbarao urged banks to draw a roadmap to provide financial services to all villages with a population of over 2,000 by March 2012. 
 
"The lead bank in each district has been asked to draw a roadmap by this month (March 2010) for ensuring that all villages with a population of over 2,000 will have access to financial services through a banking outlet, not necessarily a bank branch, by March 2012," Subbarao said.

"All domestic public and private sector commercial banks have agreed to come up with their specific, board approved financial inclusion plans (FIPs) by March 2010 to be rolled out over the next three years. These plans will have both qualitative and quantitative milestones," Subbarao told delegates.