RBI panel moots banks for low income households

MUMBAI Tue Jan 7, 2014 6:26pm IST

A customer deposits money at the teller counter of a bank's microfinance division in Mumbai October 25, 2008. REUTERS/Punit Paranjpe/Files

A customer deposits money at the teller counter of a bank's microfinance division in Mumbai October 25, 2008.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

MUMBAI (Reuters) - A Reserve Bank of India panel has recommended setting up a special category of lenders that would exclusively cater to small businesses and low income households to expand the number of customers with access to banking services.

The panel said these banks would focus on providing payment services and deposit products, with a maximum balance of 50,000 rupees, to its target customers.

The report also recommended setting up a category of wholesale banks in India that would provide funds to other banks and financial institutions that directly lend to low income households.

The recommendations come before the RBI is due to issue new banking licenses as part of efforts to improve the financial reach in a country where 60 percent of people do not have a bank account and nearly 90 percent of small businesses have no formal financial access.

The recommendations were issued by a panel set up by RBI Governor Raghuram Rajan soon after he joined office in September and is headed by veteran banker Nachiket Mor.

($1 = 62.3450 rupees)

(Reporting by Suvashree Dey Choudhury and Subhadip Sircar; Editing by Rafael Nam)

FILED UNDER:

Monetary Policy Committee

Reuters Showcase

Microfinance

Microfinance

Funding the unfunded: India helps small business borrow to grow  Full Article 

Insurance Sector

Insurance Sector

UK healthcare firm Bupa sees strong growth in India  Full Article 

Sensex Rises

Sensex Rises

Sensex edges up; consumer and healthcare stocks rise  Full Article 

Market Eye

Market Eye

FTSE adds nine Indian firms as large-caps in Asia-Pacific ex-Japan index   Full Article 

Indian Ocean Diplomacy

Indian Ocean Diplomacy

PM Modi to ramp up help for Indian Ocean nations to counter China influence  Full Article 

ECB Bond-Buying

ECB Bond-Buying

ECB raises growth forecasts, to start printing money next week  Full Article 

China Economy

China Economy

China signals "new normal" with lower annual growth target  Full Article 

Pharma Sector

Pharma Sector

Panel recommends waiving late-stage trials for some drugs  Full Article 

E-commerce

E-commerce

China backs e-commerce expansion in win for Alibaba, JD.com  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage