Institutional credit to rural sector must get more attention: President

Institutional credit to rural sector must get more attention: President: Says access to banking facilities to the country’s population still not very encouraging...

Institutionalising credit

This refers to "Institutional credit to rural sector must get more attention: President” (The Hindu Business Line, August 24). During the three years Dr Raghuram Rajan has been heading RBI, India has seen several reforms initiatives in the financial sector, both on institutional and infrastructure fronts and on policy and perception relating to savings and credit management. Rajan era saw RBI asserting that it would be the central bank’s objective to bring all institutions doing banking business within its regulatory and supervisory ambit. It is another matter that if Dr Rajan had explained his objective so transparently, the conversion of some of the NBFCs as banks or setting up of Postal bank would not have seen the light of the day.
The unfinished agenda left for Urjit Patel in streamlining processes and procedures in banks and institution building by the outgoing governor is huge. This is in addition to
certain areas like rural credit management and revamping the banking channels(cooperatives and RRBs) in the rural sector which did not get adequate attention since the beginning of economic reforms circa 1991.
While referring to the trust savers repose in banks in regard to expectations about safety and a reasonable return, in fact President was voicing the concerns of the majority of millions of middle class savers who provide the resources for banking business. To restore common man’s faith in the banking system, measures like improving recovery of loans, reducing costs in management of funds by banks and
ensuring that the workforce remain secure and satisfied are all important.

M G Warrier, Mumbai

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