Recognise the economic potential of Eastern India, RBI told

 The Dollar Business Bureau The Prime Minister of India, Narendra Modi, on Thursday, urged the Reserve Bank of India to encourage the financial institutions in setting better targets for financial inclusion over the coming 20 years. Addressing the inaugural session of RBI Conference on Financial Inclusion, Narendra Modi also urged the RBI to set goals for achieving intermediate targets of 2019, 2022, 2025 and 2035-100 years of RBI. The Prime Minister further stressed on need for considering geographic parameters besides economic and social parameters, in order to achieve financial inclusion. In this regard, the Prime Minister urged the banking sector to recognize the economic potential of Eastern India and urged to make plans for the improvement of the same. Referring to the schemes like Pradhan Mantri Jan Dhan Yojana, and the Direct Benefit Transfer of LPG subsidy, the Prime Minister lauded the role of banking sector in ensuring financial inclusion. However, he also asked the banking sector to come up with creative financial inclusive instruments to prevent farmer suicides and also to meet the requirements of country’s youth, in terms of providing knowledge and skilling. The Prime Minister also urged the RBI to ensure that India starts manufacturing of paper and ink in India that are used in printing currency notes. Meanwhile, Raghuram Rajan, Governor of RBI, in his address at the event, cautioned banks with excessive lending to the infrastructure sector. Terming the case as a key to the national security, the RBI Governor said the loans to the infrastructure sector should not override the overall financial stability. The RBI Governor informed that the banks had to face a tough time as the power sector faced troubles, following the Supreme Court’s decision to cancel the allocation of 204 coal mines by the previous government. Stating that there exists a constructive dialogue between RBI and the Government of India, Raghuram Rajan highlighted on need for strengthening the national financial institutions like Central Bank. Mentioning the case of Public-Private Partnership (PPP) model, the RBI Governor said that there is a need for more public investments, as the private investments in infrastructure through PPP model still remain weak.    

This article was published on April 2, 2015.