BENGALURU: Speaking at a national seminar on ‘Equity Access and Inclusion’ organized by NIRD and Panchayat Raj,  RBI Governor Raghuram Rajan said that, the country needs to continue fine-tuning rules on collateral and interest rates to make sure that financial institutions have enough incentives to keep helping the poor.

Pitching for financial inclusion, the apex bank governor said that RBI is working to make it captivating for financial institutions to everyone as it is a significant building block for sustainable growth.  He furthered mentioned that the country has achieved a long feat in the financial inclusion process, but it still has to cover a long way to work on to get recognized globally.

"We are steadily moving from mandates, subsidies and reliance on public sector banks for inclusion to creating enabling frameworks that make it attractive for all financial institutions to target the excluded, even as their interests (the excluded) are protected through education, competition and regulation," added Dr. Rajan – reports TOI.

Talking about how to overcome the problem of money laundering, the apex bank governor suggested three public policy approaches – implementing mandates and subventions, transforming institutions and moving away from credit. There are risks emanating from mandates, he said, while also adding that "narrow targeting of mandates to the truly underserved and explicit payment for fulfilling the mandate is necessary so that they are delivered by the most efficient." He outlined five major issues that arises when managing the system, and how the RBI is working to simplify those i.e. know your customer requirements, encouraging competition to prevent exploitation, ensuring some flexibility and forgiveness in financial arrangements, the need for skilling, encouraging financial literacy and ensuring consumer protection. 

"Easy payments and cash-out will make formal savings more attractive. Further, with expanding cash-in, cash-out points through the soon-to-be-launched Postal Payment Bank and telecom-affiliated payment banks, and making transfers from bank account to bank account easier via mobile through the Unified Payment Interface (UPI), we are on the verge of solving the last mile problem," added Dr. Rajan.

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