Reddy calls for greater financial inclusion

MUMBAI: India still has a long way to go in becoming financially inclusive. That was the message Reserve Bank of India governor Y V Reddy sent out here.

He pointed out that only 30% of India’s adult population was financially included as against 98% in Malaysia.

Reddy also underscored India’s need to adopt different policies from other Asian economies, given its higher trade and current account deficits. He also drew attention to the ‘considerable headroom’ other Asian nations enjoyed in the fiscal space.

Earlier,  Zeti Akhtar Aziz, governor of Bank Negara Malaysia, the country’s central bank, said, “Financial inclusion in Asia is not commensurate with its growth.”

Aziz added, “While financial liberalisation can bring a lot of benefits, it will also bring in a great deal of volatility, affecting a country’s economic objectives.”

The central bankers also spoke of the halted status Asian economies are held in now compared to a decade back. Reddy said, “Asian countries’ huge foreign reserves which were criticised a decade back are now said to be playing a balancing role in the global economy.”