MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Forms Committee to Promote Financial Inclusion

The Reserve Bank of India (RBI), the central banking authority of the country, recently established a 14-member committee with the objective of implementing a five-year action plan for financial inclusion. The committee will be led by Deepak Mohanty, the executive director of RBI.

Responsibilities of the committee include the review of current financial inclusion policy; the identification of lessons from a review of past financial inclusion efforts; the articulation of policy and institutional frameworks for financial inclusion; and the elaboration of a monitorable, medium-term action plan for various components, such as “payments”, “pension” and “social security transfers” [1].

As was reported by MicroCapital on Septermber 5, 2014, “Pradhan Mantri Jan Dhan Yojana,” a national financial inclusion campaign, was launched in India in August 2014. Since that time, approximately 167 million accounts have been opened with a total balance of INR 20,000 crore (USD 3.12 billion) as of July 8, 2015 [2]. Approximately 51 percent of these accounts had zero balance as of the same date [2].

By Caroline Zhu, Research Associate

About Reserve Bank of India (RBI)

Reserve Bank of India (RBI) is India’s central banking authority. Established in 1935, RBI undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies (NFBCs). The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in cases of banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. RBI reported total reserves of INR 22.6 trillion (USD 354 billion) as of July 24, 2015.

About Pradhan Mantri Jan Dhan Yojana (PMJDY)

Pradhan Mantri Jan Dhan Yojana is a national financial inclusion campaign that was launched in August 2014 in India. The plan aims to provide universal access to banking facilities with at least one basic banking account for every household. It also promotes financial literacy, access to credit, insurance and pension facilities.

Sources and Additional Resources:

[1] Reserve Bank of India press release: “RBI constitutes a Committee on Medium-term Path on Financial Inclusion,” https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=34459

[2] Business Standard news: “RBI constitutes committee on financial inclusion,” http://www.business-standard.com/article/finance/rbi-constitutes-committee-on-financial-inclusion-115071501190_1.html

MicroCapital, September 5, 2014, MICROCAPITAL BRIEF: India’s New Financial Inclusion Plan Seeks to Bring Every Household Bank Account, Pension, Insurance

MicroCapital Universe Profile: Reserve Bank of India (RBI)

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