Local area banks must in every rural district: Basix CEO

Baramati, Mar 12 (UNI) Calling for the establishment of a strong network of local area banks to direct credit flow effectively to the agricultural sector, Founder-Chairman and CEO of Basix Vijay Mahajan, urged the government ''to ensure that there are at least three such local area banks in every district in the rural areas.'' Addressing the special plenary session at the 6th Annual Baramati Initiative on ICT and Development--''The Potential of e-Agriculture'', Mr Mahajan said this would ensure adequate and effective credit flow to farmers.

The CEO of India's first micro-finance institution, lamented the fact that ''rural finance is still seen as patronage, Strongly emphasising the fact that ''rural India and the agricultural sector needs investment and not subsidies'', Mr.

Mahajan welcomed the Union Finance Minister's move to double farm credit in three years as also the financial package prepared to revitalise the Indian co-operative sector.

Improving farmers' access to adequate credit and the use of Information Technolgy can help achieve the pressing need to enhance returns, increase yields, reduce risks and cut costs in the agricultural sector, he said.

''However, IT cannot work in a vacuum and in old organisations and hence institutional development and rejuvenation is needed,'' he said.

Welcoming the setting up of the Commission on Financial Inclusion, he, however, cautioned against falling back on the system of subsidies and the working style of old institutions.

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