New Delhi, Jan 29 (KNN) Reserve Bank of India (RBI) has made sustained efforts to increase the penetration of formal financial services in unbanked areas, while continuing with its policy of ensuring adequate but viable flow of credit to priority sectors of the economy, Executive Director of RBI, Deepali Pant Joshi has said.

“We have adopted a structured, planned and integrated approach towards Financial Inclusion which is focusing on improving access to financial services and also encouraging demand for financial services through financial literacy initiatives,” she said, addressing at a workshop organised by Government of Madhya Pradesh here on January-24.

“RBI’s perspective on Financial Inclusion aims at giving a specific direction to the collaborated efforts to gain synergic benefits. Therefore, we have defined Financial Inclusion as the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players,” RBI Executive Director added.

The first phase of FIPs (Financial Inclusion Plan) was implemented over the period 2010-2013.

Giving a snapshot of the progress made by banks under the Financial Inclusion Plan during the period from April 2010 to March 2013, she informed, “With the addition of nearly 9.48 million farm sector households during this period, 33.8 million households have been provided with small entrepreneurial credit as at the end of March 2013.”

“With the addition of nearly 2.24 million nonfarm sector households during this period, 3.6 million households have been provided with small entrepreneurial credit as at the end of March 2013,” she added.

She further said the focus under the FI plan has now shifted towards leveraging the banking network created for extending other products like - credit, etc. which will help make the business more viable for banks. This would also ensure that the large number of accounts opened see large volume of transactions taking place and people reap the benefits of getting linked to the formal financial institutions.

Joshi emphasized the efforts made to increase the penetration of formal financial services in unbanked areas.  Some of the efforts made by the apex bank were - Institutional Mechanism; Bank led Model; Integrated approach towards Financial Inclusion and Financial Literacy; Engaging Business Correspondents; Relaxation of KYC norms etc. (KNN/SD)