Mumbai, Sept 23 (KNN) The Reserve Bank of India (RBI) today announced the appointment of a committee which will frame a clear vision for improving comprehensive finance services for small businesses and low income households.
The announcement of the committee headed by Nachiket Mor, Member on the Central Board of Directors, RBI comes in less than three weeks of Raghuram Rajan taking over as RBI Governor.
The 13 member committee includes former high profile CEO of Citi Group, Vikram Pandit.
The committee which will submit its final report by December 2013 has been mandated to, “frame a clear and detailed vision for financial inclusion and financial deepening in India.”
It will also lay down a set of design principles that will guide the development of institutional frameworks and regulation for achieving financial inclusion and financial deepening.
Also, the committee will review existing strategies and develop new ones that address specific barriers to progress and that encourage participants to work swiftly towards achieving full inclusion and financial deepening, consistent with the design principles.
Significantly, the expert panel will develop a comprehensive monitoring framework to track the progress of the financial inclusion.
D Gandhikumar, President of Federation of Indian Micro and Small & Medium Enterprises (FISME) - the largest national MSME body, wholeheartedly welcomed the setting up of the Committee for Small Businesses and low income households.
“With barely 2-3 per cent of MSMEs having access to institutional credit which is also consistently falling in percentage terms, the small businesses and MSMEs increasingly feel being excluded in the present financial architecture in India,” Gandhikumar added.
According to FISME, RBI needed to take bold steps to enable creation of a very large number of financial intermediaries having reach in smaller towns and cities.
The other members of the committee include Chairman, NABARD, Prakash Bakshi; Chairman, Mahindra & Mahindra Financial Services, Bharat Doshi; Managing Director and CEO, National Payments Corporation of India A P Hota; CEO, Standard Chartered Bank India, Sunil Kaushal; Managing Director & CEO, CRISIL Limited, Roopa Kudva; Chairman & Managing Director, Bank of Baroda, S S Mundra; and Managing Director & CEO, Axis Bank Shikha Sharma.
The MSME sector, which accounts for about 45 per cent of the manufacturing output and around 40 per cent of the total export of the country, has been pressing for increased flow of bank credit to the sector.