This refers to Subir Roy’s column “The next step for Indian banking” (Value for money, January 16). Despite vigorous branch expansion, the present banking system – both private and public – has not been able to ensure that the vulnerable sections of the population utilise basic banking services. Against this background, it is worthwhile to note that several Asian and African countries have established microfinance banks that cater to basic banking requirements (both credit and savings) of low-income communities with relatively hassle-free procedures. Even a small country like Pakistan has 10 microfinance banks — the last one having been inaugurated last week in Karachi. Then, the Central Bank of Nigeria created a record of sorts by licensing 37 microfinance banks in Kano on a single day on January 13. Indian microfinance institutions could also be considered for conversion into microfinance banks under the New Branch Licensing Policy.
B Vithal Rao Hyderabad
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