All villages to get banking services by 2015: RBI
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Kochi: By 2015 all villages will have banking services and there will be bank accounts for all households, according to Reserve Bank Deputy Governor K C Chakrabarty. "Even after 40 years of nationalization of banks, only 35,000 villages have access to banking services. We have a large-scale financial exclusion. Micro Small and Medium Enterprises (MSME) need to be made a part of integrated planned growth," said Chakrabarty while releasing the Indo Micro, Small and Medium Enterprise Report 2010. The focus of policies on lending should be on non-exploitation of the poor and not on subsidized assistance. Subsidizing would, in effect, deprive the poor of the existing facility, he said. Since banking is business and the cost of delivery is high, viability of the industrial units which enjoy the loan facility is important. A unit which deserves loan, as per the bank's analysis, should get it. If there is lack of creditworthiness, measures should be taken to improve it. The society in general and institutes such as ISED in particular, can play an effective role in improving the creditworthiness of units, opined Chakrabarty. Chakrabarty said there were no policy gaps in respect of lending to MSMEs, though problems prevailed at the implementation stage. The banking sector was functioning effectively and there has been considerable increase in lending to the sector. Chakrabarty said banking business should be done at affordable prices and banks should be allowed to do business at appropriate rates of interest. RBI will focus on the rehabilitation of MSMEs.

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