RBI governor Raghuram Rajan has kind of a bee in his bonnet about financial inclusion and that is why he is more than ready to allow urban cooperative banks to acquire the status of scheduled commercial banks if they meet the criteria of minimum capital and deposit size.
The new governor seems bent on allowing a proliferation of small banks so the whole country gets banked. India has 88 scheduled commercial banks: 26 state-run banks, 20 private banks and 42 foreign banks.
Financial inclusion has of late become a major goal of the apex bank as a high 40% of India’s population does not take part in formal financial services.
RBI had introduced a three-year financial inclusion program in 2010 that saw 200,000 villages covered by banks.
RBI is working on a new financial inclusion plan to broaden access in the next years.
Sources say the RBI idea of allowing cooperative banks to transform themselves into scheduled commercial banks has thrilled the cooperative world.