Financial inclusion is a policy priority: Das

What is the News?

The Reserve Bank of India(RBI) Governor addressed the Economic Times Financial Inclusion Summit.

Key Highlights from the Address: 

Financial Inclusion:

• Financial Inclusion will continue to be the RBI’s policy priority as India recovers from the pandemic.
• For this, RBI will soon launch a ‘financial inclusion index’ to measure and improve the extent of access, usage, and quality of financial inclusion in the country.
• Moreover, to promote financial inclusion, RBI has a pilot project going on in association with banks under which, at least one district in each State/UT would be 100% digitally enabled. The project has been initially started in 42 districts in 2019.

Micro finance:

• Microfinance is a form of financial service which provides small loans and other financial services to poor and low-income households.
• RBI has recently issued a consultative document for harmonising regulatory frameworks for various regulated lenders in the microfinance sector.
• The primary objective of the document is to address the concerns relating to the over-indebtedness of microfinance borrowers; enable market mechanisms to rationalize the interest rates and empower the board to make an informed decision by enhancing the transparency of loan pricing.

Increase in Digital Payments:

• The number of prepaid payment instruments(PPI) had increased at a compounded annual growth rate of 53% from 41 crores in May 2017, to 226 crores in May 2021.
• During June 2021, payment systems in India had processed more than 15 crore transactions amounting to almost ₹4.5 lakh crore per day.
• UPI platform has also witnessed over 280 crore transactions in June 2021. Globally, there has been a lot of interest in UPI.