The Reserve Bank of India (RBI) reportedly has announced that the number of no-frills or zero-balance account holders has doubled since 2010, rising to 103.2 million as of March 31, 2012. The announcement comes as part of an update to the RBI financial inclusion program, which was introduced to increase the use of financial services such as low-balance bank accounts. The program has allowed mobile phone companies to partner with banks in order to offer such services and requires banks to open 25 percent of all new branches in unbanked rural areas.
By Brett Cohen, Research Associate
About Reserve Bank of India
Established in 1935, the Reserve Bank of India (RBI) undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies (NFBCs). The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in cases of banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. In 1979, the National Bank for Agriculture and Rural Development (NABARD) was formed at the behest of RBI to provide regulatory oversight to regional rural banks (RRBs) and to promote the development of agricultural lenders: tasks that had been the responsibility of RBI. While all microfinance institutions (MFIs) and non-banking financial companies still operate under RBI regulations, the responsibility for inspecting nonprofit MFIs, agricultural lenders, RRBs, state cooperative banks, district central cooperative banks and state cooperative agricultural and rural development banks was transferred to NABARD. RBI maintains these responsibilities for for-profit MFIs. Although RBI was originally the parent organization of NABARD and until October 2010 held a 72.5 percent stake in the outfit, RBI owns a one-percent stake in NABARD as of 2011.
Sources and Additional Resources
RBI presentation, “FINANCIAL INCLUSION – An Update”
http://rbidocs.rbi.org.in/rdocs/Speeches/PDFs/FIP060812DC.pdf
Zeenews.india.com story: “No-frills accounts rise over two-fold in last 2 years”
http://zeenews.india.com/business/news/finance/no-frills-accounts-rise-o…
MicroCapital.org story, May 15, 2012: “MICROCAPITAL BRIEF: Union Cabinet of India to Present Microfinance Bill to Parliament”
https://www.microcapital.org/microcapital-brief-union-cabinet-of-india-to…
MicroCapital.org story, April 16, 2012: “MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN) Asks Reserve Bank of India (RBI) to Assist in Recovering Loans Outstanding in Andhra Pradesh”
https://www.microcapital.org/microcapital-brief-microfinance-institutions…
MicroCapital.org story, May 21, 2011: “MICROCAPITAL BRIEF: India’s MicroSave Publishes “No Thrills: Dormancy in NFA Accounts,” by Ann-Byrd Platt, Akhilesh Singh, Sachin Bansal, Anurodh Giri, Akhand J Tiwari re “No Frill” Microfinance Accounts”
https://www.microcapital.org/microcapital-brief-india%E2%80%99s-microsave…
MicroCapital Universe Profile: “Reserve Bank of India”
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Res…
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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