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Much remains to be done on financial inclusion: KC Chakrabarty

Friday, 25 April 2014 - 2:16pm IST | Agency: PTI

Outgoing Reserve Bank Deputy Governor KC Chakrabarty today termed his stint at the central bank as "very satisfactory," but said there are certain things which still remain unaccomplished, especially on the financial inclusion front. The commercial banker-turn-central banker, who announced his decision to quit last month - two months before his second term was to end on June 30 - citing personal commitment, is stepping down today.

Chakrabarty, known for speaking his mind, has been credited with doing a lot in the field of financial inclusion by pushing banks to lend to the economically weaker sections and opening more branches in unbanked areas.

Some of his initiatives include stopping banks from charging prepayment penalties on mortgage loans, forcing lenders to end discriminatory pricing, interest rate deregulation on the savings accounts, and ending penalties for not maintaining minimum balance, among others. "I am very much satisfied with whatever I have done, but I can't say I have achieved everything. A lot of ground has to be covered. We have a long way to go. Financial exclusion is very high in our society," Chakrabarty told PTI in an interview. 

He said though a lot has been accomplished by the apex bank, there are still many areas where work remains to be done. "Yes, so far as the area of financial inclusion is concerned, the number of transactions has not gone up and credit products have also not picked up which could have made these accounts commercially viable," the statistician-turned- academic-turned banker said.

Chakrabarty, who joined RBI in 2009, was in charge of banking supervision, currency management, financial stability, customer service, rural credit, HR management, Deposit Insurance and Credit Guarantee Corp, Rajbhasha department and Right to Information, among others. He is also the RBI nominee on the Financial Stability Board, an international body.  He said the apex bank has been successful in creating more touch points, thereby giving a number of people access to credit and bringing them into formal financial system. "We have created access by creating over 3.5 lakh touch points. So far as opening the basic savings accounts is concerned, over 200 million savings bank accounts have been opened, which is an achievement," he added.


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