Committee to work out financial inclusion of vulnerable sections

New Delhi, June 26 (UNI) To bring vulnerable sections of society into the ambit of opportunites offered by financial services, the government today announced constitution of a Committee, headed by Dr C Rangarajan, to work out a strategy of 'financial inclusion'.

The aim of the government is to extend the the reach of the financial sector to the vulnerable, poor and marginalised groups by minmising, if not completely eliminating, the formal and informal barriers to access to financial services encountered by such people.

Dr Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, will submit the Report of the Committee by November 30, 2006.

The following are the terms of reference of the Committee; (a) to study the pattern of exclusion from access to financial services disaggregated by region, gender and occupational structure; (b) to identify the barriers confronted by vulnerable groups in accessing credit and financial services, including supply and demand situation in this regard and institutional constraints; (c) to review the international experience in implementing polices for financial inclusion and examine their relevance and applicability to India; (d) to suggest a strategy to extend financial services to small and marginal farmers and other vulnerable groups, incuding measures to streamline and simplify procedures, reduce transaction costs, and make operations transparent.

It will outline measures for effecting institutional changes to implement the proposed strategy to financial inclusion.

The Committee will recommend a monitoring mechanism to assess the quality and quantum of financial inclusion, including indicators for asseesing progress.

The members of the Committee are Vinod Rai, Special Secretary, Ministry of Finace, Dr (Mrs) Rahini Nayyar, Adviser, Rural Development, Mr M B N Rao, CMD Canara Bank, Mr Yogesh Agarwal, MD, State Bank of Patiala, Prof Mahinder Dev, Director, Centre for Economic and Social Studies, Hyderbad, Mr Vijay Mahajan, CEO, BASIX, Mr R Gopalkrishnan, Executive Director, Tata Sons, Mr A P Fernandes, Director, MYRADA, and Dr Y S Thorat, Chairman NABARD.

The setting up of the Committee at the tail end of the Tenth Five Year Plan is itself reflective of the reality that the poor and vulnerable sections of society have been left out of the opportunites offered by financial services. It is obvious that they have not benefitted from the development process and a large chunk of farmers continue to be in clutches of money lenders, despite the phenomenal hike in institutional credit.

There has also been considerable expansion, modernisation and diversification of ownership of financial institutions.

The groups that have mostly been excluded from the high growth of credit and spread of financial services include women, small and marginal farmers, people in the unorganised sector, the self- employed and the pensioners.

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