Mumbai: Indian banks have made great progress in providing access to banking in the remotest parts of the country, but much more needs to be done to bridge last-mile credit delivery, Reserve Bank of India deputy governor Swaminathan J said on Wednesday.
Speaking at a conference of lead district managers and district development managers in Hubballi, Karnataka, Swaminathan said banks need to improve usage and quality of services to promote financial inclusion.
“India has made significant strides in enhancing ‘access’ to banking and financial services, reaching even the most remote areas,” Swaminathan said. “However, there is still considerable ground to cover in deepening financial inclusion. This requires greater focus on promoting ‘usage’ and improving the ‘quality of services’.”
Swaminathan said that if local representatives know their districts well, they could leverage upon data analytics and field surveys to gain insights into economic activities, local credit needs and barriers to credit access.
“A holistic understanding of your district will enable you to identify gaps in financial inclusion, assess the credit needs of different sectors and design targeted strategies for intervention,” he said.
Swaminathan also said that while credit delivery to priority sectors has progressed over time, there is still significant work to be done, especially for micro, small and medium enterprises.
According to him, nearly half of self-help groups (SHGs) are yet to be linked to formal credit and a large proportion of small and marginal farmers still lack access to bank financing.
