Banking to Unbanked Population
Speaker : Ms.R.S. Isabella,
Executive Director & Managing Director In-charge, Repco Bank
“Financial literacy and inclusion is the challenge today, we have lots of opportunities in regard to financial inclusion and that’s exactly what the government is trying to do with its schemes,” says Ms. R.S. Isabella, Managing Director, REPCO Bank. She addressed the students of Loyola Institute of Business Administration on the topic ‘Banking to Unbanked Population’ at the BMI session held on 31st January 2018.
She says financial inclusion aims at delivery of banking services to the common man including the underprivileged, migrant workers, senior citizens and farmers. This will extend the access of a bank to every single citizen of the country at an affordable cost. In a recent study, it was evident that the unbanked population stands at 233 million from around 557 million and she says we still have a long way to include them too. “The main reason why people do not wish to open a bank account is because of low financial literacy, remoteness of the place and cultural barriers mainly. We form 21% of the world unbanked population which is a sad state that needs immediate attention,” explains Ms. Isabella who has a dual Masters’ degree in Bank Management and Business Administration.
She says there are two approaches of the RBI to inculcate financial literacy among people – Minimalized approach which is making basic financial product and services available and Expanded approach which is making ancillary services like insurance available easily. “Some of the main initiatives by the Government has been Nationalisation of banks, forming self-help groups, easy loan scheme, micro-financing etc. which has made it easy to implement these approaches,” says Ms. Isabella. She believes the promotion of digital villages play a key role as it enhances access to seamless and digital banking and thus enabling direct transfer of government benefits without middlemen. She explained the importance of cooperative banks and the crucial role they play which is almost like a lifeline in the rural parts of the country. It is one of the largest structure in India with more than 200 million members.
Contributed by: Jasmine Sangeetha Jarald