Thursday, August 27, 2009

Roadmap for Access to Banking Facility in Every Village by 2011

A High Level Committee set up by the Reserve Bank of India to draw the Roadmap for Access to Banking Facility in every village by 2011 has recommended the following:
1.A sub-committee of the District Consultative Committee may draw up a roadmap to provide banking services in any form to every village with a population of over 2000 at least once a week on regular basis by March 2011 and in States where banking penetration is better, the date may be suitably advanced.
2.Quarterly Public Meeting at District Level for Awareness and Feedback: The Lead District Manager may convene a quarterly public meeting at various locations in the district where the Reserve Bank, banks having presence in the area and other stakeholders are present to generate awareness of the various banking policies and regulations relating to the common person, obtain feedback from the public and provide grievance redressal to the extent possible at such meeting or facilitate approaching the appropriate machinery for such redressal.
3.Role of State Governments: State Governments should ensure road and digital connectivity to all centres where penetration by the formal banking system is required, expedite use of IT solutions for disbursal of National Rural Employment Guarantee Act (NREGA) and social security payments and extend support to banks in the recovery of their dues.
4.Preparation of State Level/District Level Plan: A one-time comprehensive State Level / District Level Development Plan should be formulated for all the districts that should identify the enablers and impeders for banking development and indicate the specific actions to be taken by banks, State Governments and other stakeholders to ensure banking development for inclusive growth.
5.Strengthening SLBC: The Chief Secretary of the State concerned may co-chair the meetings of the State Level Bankers' Committee (SLBC), along with the CMD of the convenor bank. The Chief Minister / Finance Minister may be invited to attend and chair the meetings periodically, say at least once a year, when there are majorpolicy issues on the agenda. The Deputy Governor / Executive Director of the Reserve Bank may participate in the SLBC meetings on a selective basis.
6.Strengthening DCC Machinery: In view of the large membership of the SLBC, it is desirable for the SLBC to constitute sub committees for specific tasks. At the District Consultative Committee (DCC) level, sub committees as appropriate may be set up to work intensively on specific issues and submit reports to the DCC for its consideration.
7.Role and Set-up of LDM’s Office: The Committee recommended strengthening of the office of Lead District Managers (LDMs), posting persons of appropriate level and attitude as also providing appropriate infrastructural support, it being the focal point for successful implementation of the Lead Bank Scheme.
8.Financial Literacy and Credit Counselling: Each Lead Bank should open a Financial Literacy and Credit Counselling centre in each district by following the recent guidelines issued by the Reserve Bank.
9.Initiative for Urban Areas: Banks having the largest presence in each city with more than one million population (to start with) may take the leadership in convening a meeting of bankers and allocating responsibility for various wards to different banks, to ensure that all urban households have easier access to banking services.
10.Greater Role for Private Sector Banks: Private sector banks should involve themselves more actively by bringing in their expertise in strategic planning and leveraging on information technology. The Lead Banks, on their part, should also ensure that private sector banks are more closely involved in the Lead Bank Scheme, both while drawing up and in implementing the Annual Credit Plans.
11.Revised PSMIS reporting system: The Committee suggested implementation of revised Priority Sector Monitoring and Information System (PSMIS) on a pilot basis in one / two States

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