According to data presented by Deepali Pant Joshi, executive director of Reserve Bank of India (RBI), at the recent International Summit of Skill Development in New Delhi, the number of villages with access to banks has risen from 67,000 in March 2010 to 211,000 in December 2012 out of a total of 600,000 villages in the country. The rise was due in part to an increase in business correspondents (BCs), individuals or entities appointed by a bank to act as agents to provide banking services in areas where the bank has no branches. The number of BCs increased from 34,500 in 2010 to 152,000 in 2012. In addition, 4,323 traditional branches were opened in previously unbanked villages from April 2012 to December 2012. As a result of this growth, which occurred mostly in larger villages, RBI reportedly will focus on increasing financial access in villages with populations of fewer than 2,000 people.
By Jennifer Young, Research Associate
About Reserve Bank of India (RBI):
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 non-banking financial companies such as for-profit microfinance institutions operate under RBI regulations, the responsibility for inspecting 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
Business Standard Story: “Banking Connectivity Surges with BC Mode”
http://www.business-standard.com/article/finance/banking-connectivity-jumps-to-2-11-lakh-villages-rbi-113041801146_1.html
MicroCapital Story: “MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Releases Regulations Governing New Bank Licenses,” March 11, 2013.
https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-rbi-releases-regulations-governing-new-bank-licenses/
MicroCapital Story: “MICROFINANCE PAPER WRAP-UP: “Map of Microfinance Distribution in India” by Amulya Krishna Champatiray, Parul Agarwal and Santadarshan Sadhu; published by the Centre for Micro Finance (CMF),” January 29, 2013.
https://www.microcapital.org/microfinance-paper-wrap-up-map-of-microfinance-distribution-in-india-by-amulya-krishna-champatiray-parul-agarwal-and-santadarshan-sadhu-published-by-the-centre-for-micro-finance/
MicroCapital Story: “MICROCAPITAL BRIEF: First Phase of India’s 2011 Census: 40% of Households Do Not Have Access to Banking Services, 5% of Villages Have Banks,” April 9, 2012.
https://www.microcapital.org/microcapital-brief-first-phase-of-indias-2011-census-40-of-households-do-not-have-access-to-banking-services-5-of-villages-have-banks/
MicroCapital Story: “MICROCAPITAL BRIEF: Unique Identification Authority of India (UIDAI) Task Force Recommends Micro-ATMs to Improve Financial Inclusion,” March 19, 2012.
https://www.microcapital.org/microcapital-brief-unique-identification-authority-of-india-uidai-task-force-recommends-micro-atms-to-improve-financial-inclusion/
MicroCapital Story: “MICROCAPITAL BRIEF: Reserve Bank of India to Issue Guidelines For Interoperability Among Business Correspondents ‘Shortly,” February 14, 2012.
https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-to-issue-guidelines-for-interoperability-among-business-correspondents-shortly/
MicroCapital Story: “MICROCAPITAL BRIEF: Indian Finance Ministry Clears Draft Microfinance Bill, Considers Engaging Post Office Banks to Promote Financial Inclusion,” February 8, 2012.
https://www.microcapital.org/microcapital-brief-indian-finance-ministry-clears-draft-microfinance-bill-considers-engaging-post-office-banks-to-promote-financial-inclusion/
MicroCapital Story: “MICROCAPITAL BRIEF: Indian Government Publishes Draft of Microfinance Institutions Bill, Would Make Reserve Bank of India (RBI) Sole Regulator, Establish Microfinance Development Council, Microfinance Development Fund,” August 15, 2011.
https://www.microcapital.org/microcapital-brief-indian-government-publishes-draft-of-microfinance-institutions-bill-would-make-reserve-bank-of-india-rbi-sole-regulator-establish-microfinance-development-council-microfinance/
MicroCapital Universe Profile: Reserve Bank of India (RBI)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+India+%28RBI%29
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