New bank licences: the meaning of inclusion

Abstract

The basic functions of the banks and their impact on inclusion should inform the choice of the new banks. The Reserve Bank of India (RBI) has issued final guidelines for new bank licences. It is time to reflect on what the new banks should achieve, including expectations on financial inclusion. While inclusion, articulated as the physical presence of banks in unbanked locations, is important, it glosses over exclusion in urban areas. In general, policy equates inclusion with poverty, rural areas, agriculture and small-ticket credit. As RBI examines the business plans and issues licences to new applicants, it should go beyond these generalized targets to look at some nuanced parameters. Read more at: https://www.livemint.com/Industry/bGJ4YBT2GraAIJxW1DaT3H/New-bank-licences-the-meaning-of-inclusion.html