CAIT WELCOME RBI PANEL REPORT ON FINANCIAL INCLUSION CALLED FOR STRENGTHENING OF NBFCS & SETTING UP OF SPECIALISED BANKS

The Confederation of All India Traders (CAIT) while reacting to the report of Nachiket Mor Committee, constituted by RBI Governor Mr. Raghuram Rajan, on comprehensive financial services for small business and low income households, has stressed the need of creating an alternate financial mechanism to cater to the financial requirements of small business and low income households.

CAIT National President Mr. B. C. Bhartia and Secretary General Mr. Praveen Khandelwal, in a joint statement released here today at New Delhi said that even the RBI panel has also admitted that close to 90% of small businesses have no links with formal financial institutions and about 60%of the rural and urban population do not even have a functional bank account, which amply establishes the fact that the Nationalised Banks and other Government Financial Institutions have utterly failed in meeting with financial requirements of small businesses and lower income people as they do not figure on the priority of all such Banks and financial institutions.

Both Mr. Bhartia and Mr. Khandelwal welcome the suggestion of RBI panel to set up specialized banks to cater to small businesses and low income households. They further said that currently above group of people are largely dependent upon private money lenders for their financial requirements which is not a healthy practice. They said that various Non Banking Finance Companies (NBFCs) are also working in the financial sector catering primarily to small businesses and low income group. Beside implementing suggestion of RBI panel to set up specialised banks, it would be ideal if NBFCs are strengthen further with specified guidelines which may be differ from what is applicable to Nationalised Banks and other Government Financial Institutions.

Both trade leaders appreciated the suggestion of RBI panel about ensuring facility for withdrawal, payment and deposit to be set up within a 15 minutes walking distance anywhere in the Country. The Nationalised Banks alone can not provide such facilities and therefore it is essential to ensure setting up of alternate financial mechanism and thus a situation of financial inclusion can be created in the Country.

The CAIT will study the report of Nachiket Mor Committee in detail and will take up the matter with RBI Governor and the Union Government for ensuring easy financial assistance to small businesses and low income households