Reserve Bank on mission to take banking to villages

Fellow villager Hira Chowdhury was refused a loan by a bank at the district headquarters. All that's going to change, says the Reserve Bank of India (RBI), the country's central bank.

"Don't worry, banks will come to all of you, provide you loan, open your accounts and provide other banking facilities at your door steps," RBI deputy governor Usha Thorat told Sutradhar, Chowdhury and hundreds of other villagers last week at an outreach camp organised by the apex bank in southern Tripura.

Chowdhury had approached a bank in Udaipur district of southern Tripura a year ago for a Rs.50,000-loan to set up a poultry farm. The bank refused as she didn't have a guarantor. "A bank should not ask for a guarantor for a loan of Rs.50,000," Thorat said after hearing her story.

"It is not possible to set up banking networks in all the 565,000 villages across the country, but the RBI wants banking services to reach all these places," Thorat told the gathering at this hillside village, just 70 km from Agartala. The RBI will soon engage business correspondents to provide banking services in villages such as these, she said.

"To act on behalf of the banks, non-government organisations, self-help groups, cooperatives, financial bodies, retired teachers and government employees and responsible citizens will be employed as business correspondents."

"The RBI has taken several measures to cover more villages in the country," she said, adding that to improve banking services, adoption of latest digital technology is the only solution. According to her, the state and central governments needed to focus on upgrading the infrastructure in the northeast to attract more investment to the region.

"Infrastructure and industrial sectors of the seven northeastern states are still not developed, for which the credit flow is still not at par with the national average. Lack of basic infrastructure like roads, transport facilities and power is the main impediment in the way of flow of funds in the region," Thorat said.