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:

Economic Pulse

REUTERS SHOWCASE

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Article 

Indians in Iraq

Indians in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Banking Sector

Banking Sector

After record deal, more India bank takeovers on cards  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Cricket Tragedy

Cricket Tragedy

Clarke breaks down giving heartfelt Hughes tribute  Full Article 

Nigeria Violence

Nigeria Violence

Bombs, gunfire kill 81 at crowded mosque in Nigeria's Kano  Full Article 

Movie Review

Movie Review

D’Silva's “Ungli” just skims the surface  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

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