Govt plans dual licence for financial inclusion drive.

The government has mooted a dual-licensing policy — one a basic banking licence exclusively to meet financial inclusions obligation and the other for private sector aspirants that will offer all commercial banking services. Besides, it has suggested an overhaul of the banking sector to improve its efficiency and promote inclusive growth, in its latest economic survey.

The final licensing authority, the Reserve Bank of India, however, is still in the initial phases of formulating guidelines with inputs from all stakeholders for private-sector players and is known to be not very keen on providing licences to the troubled microfinance sector, which is under fire for its unfair lending practices and the way it prices its loans.But the government wants MFIs to get basic banking licences, along with non-banking financial companies, or NBFCs, and has added a clear and objective definition of basic banking functions.
While branch licensing for domestic banks has been liberalised allowing them to freely open branches subject to certain conditions, foreign banks collectively are given about 15-20 branch licences in a year.Also overseas lenders were promised stamp duty benefits and told they would be allowed to acquire local private banks, if they opted for the subsidiary route.

Extra info
  • Reserve bank of india Established in April 1, 1935, Kolkata.
  • Recently Former Deputy RBI Governor s s tarapore Passed away.

So lets do.
  • Who is the present governor of RBI?
  • What you understand by bankers Bank?
  • Expand the MFIs and NBFCs ?

                       Source – The HIndu

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