Upgrade core sector: Shetty

BANKERS CONFERENCE 2006

IDBI Chairman V P Shetty today said that creation of proper infrastructure and telecom connectivity combined with issuance of unique identity cards to citizens are the prerequisites to achieve the goals of inclusive growth in the country's vast rural tracts.

Shetty was giving an overview of the issues of inclusive growth, the theme of Bancon-2006, here at the inaugural session of the conference.

According to Shetty though banks play a key role in fostering the financial inclusion they cannot do it alone.

While highlighting the significance of recent initiatives announced by the Reserve Bank of India such as simplification of know your customer (KYC) norms in enabling the penetration of banking services, the IDBI chief said low-cost technologies were going to form the basis for creating a win-win situation in taking banking services to the doorsteps of the rural poor.

To achieve this goal, banks should focus on reducing transaction costs by using low-cost technologies, he added.

He also called for emulating the global experiences such as South African banks mobile telephone initiative and banking correspondent model adopted in Brazil to provide services at an affordable cost.

He reminded that despite the introduction of rural banks and lead banks in 70s and 80s, a large section of the country's population still remained financially exclusive.

"The measures to achieve financial inclusion is based on the three pillars of access, affordability and actual utilisation of financial services," he added.