The RBI Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (CCFS) lays out several recommendations to strengthen the supply side with respect to credit outreach through the banking and non-banking infrastructure that is already in place.
The CCFS Report has laid out a vision for Sufficient Access to Affordable Formal Credit that places a goal of achieving a Credit to GDP ratio for each district of atleast 10% by January 1, 2016, and to cross 50% by January 1, 2020.
Financial inclusion is a priority area in the minds of policy makers in India. The larger focus of this debate has been on access to credit and insurance.
One of the more debated aspects of the Mor Committee’s report on “Comprehensive Financial Services for Small Businesses and Low Income Households” is the proposal for the new class of banks, in particular the “Payments Banks”.
India faces a major financial exclusion challenge. According to the 2011 World Bank Global Findex Survey, only 35% of Indian adults have access to a formal bank account and 8% borrowed formally in the last 12 months.
In view of the rigid sectoral targets and the absence of an active trading market for PSL assets, current PSL requirements force identical strategies from all banks, with little scope for specialisation.
The Mor Committee Report offers a radical take on client protection, built around the concept of a legal right to suitability.
In the below video Dr. Nachiket Mor articulates the RBI committee's vision for financial inclusion and financial deepening in India covering aspects of Universal Electronic Bank Account, Payments, Credit, Priority Sector Lending and Customer Protection.
On January 7th, 2014 the RBI published the Report of the Committee on Comprehensive Financial Services (CCFS) for Small Businesses and Low Income Households chaired by Dr. Nachiket Mor, which was set-up to articulate a framework for financial inclusion in India.
Since its release on January 7, it has been heartening to see the amount of debate and interest generated by the Report of the Committee on Comprehensive Financial Services, chaired by Dr. Nachiket Mor.
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