Dear Comrades,
At a time when over 60 per cent of the country's population do not have access to banking services and credit facility remaining only a mirage for more than 90 per cent of the population, the Entrepreneurs & Finance Customers' Association of India (EFCAI) has urged the Reserve Bank of India (RBI) to allow post offices to start banking operations.
Pointing out that India's robust postal network can be leveraged to extend banking facilities to the poorest of the poor in rural areas, EFCAI, a city-based organization has sought the intervention of H R Khan, Deputy Governor of RBI for giving approval to the post offices to function as banks.
EFCAI has argued that the proposal if accepted can accelerate the growth of the primary sector which supports more than two-thirds of Orissa's population and thereby help achieve inclusive growth.
"The world's largest postal network is in India with over 1.65 lakh post offices out of which 1.4 lakh are in the rural areas. The postal network boasts of 23.7 crore savings accounts holding about Rs 56,369 crore. If the plan is approved by RBI and India Posts gets to start its banking operations, it will have the potential to emerge as one of the biggest banks in the country. Not only will this help the growth of the primary sector but will also ease the pressure on existing commercial banks,” Hitendra Kumar Mohanty, secretary general said in a memorandum submitted to the RBI Deputy Governor.
An expert committee constituted recently by the Government of India has made a strong case for harnessing the post office savings bank for achieving financial inclusion as the reach of post offices is twice as extensive as that of all commercial banks put together, Mohanty said.
The memorandum was submitted to Khan during his visit to the state after taking over as the RBI Deputy Governor. Khan was felicitated by the state minister for finance and public enterprises Prafulla Chandra Ghadai.
"There is a great opportunity for India as the West is on the decline. The century clearly belongs to India and China and these two Asian giants matter. Within India, those states will prosper that have resources. Orissa is a state with unlimited resources and the creativity also has to be unlimited. This is one of the very few states that has not been borrowing for the past few years and I think we are moving in the right direction,” said Khan.
The demand for allowing post offices to function as banks comes in the backdrop of dismal lending by commercial banks in Orissa to the priority sectors, particularly agriculture and MSME (Micro, Small and Medium Enterprises).
The overall agricultural advances by commercial banks stood at Rs 22,063.71 crore (as on June 30 this year), which is disproportionately low at only 30.52 per cent of the total advances (Rs 72,298.44 crore) in the same period.
Courtesy : Business Standard
