Recommendations of Deepak Mohanty Committee on Financial Inclusion
The Reserve Bank of India (RBI) has released the Report on Financial Inclusion submitted by Deepak Mohanty. The RBI had constituted the committee to examine the existing policy on financial inclusion and form a five-year plan. It was tasked to suggest a plan on several components like payments, deposits, credit, social security transfers, pension and insurance.
Augment the government social cash transfer to increase the personal disposable income of the poor. It would put the economy on a medium-term sustainable inclusion path.
Sukanya Shiksha Scheme: Banks should make special efforts to open accouns for women from lower income groups for social cash transfer.
Aadhaar-linked credit account: Aadhaar should be linked to each credit account as a unique biometric identifier, which can be shared with Credit Information Bureau to enhance the stability of the credit system and improve access.
Mobile Technology: The banks' traditional business model should be changed with mobile technology to improve ‘last mile’ service delivery.
Digitisation of land records: To increase formal credit supply to all agrarian segments through Aadhaar-linked mechanism.
Self-Help Groups (SHGs): Corporates should be encouraged to nurture SHGs as part of Corporate Social Responsibility (CSR).
Subsidies: The government should replace current agricultural input subsidies by direct income transfer.
Agricultural Interest Subvention Scheme: It should be phased out.
Crop Insurance: The government should introduce a universal crop insurance scheme covering all crops starting with small and marginal farmers with monetary ceiling of Rs. 2 lakhs.
Multiple Guarantee Agencies: Should be encouraged to provide credit guarantees in niche areas for micro and small enterprises (MSEs). It would also explore possibilities for counter guarantee and re-insurance.
Unique identification of MSME: It should be introduced for all MSME borrowers and the information from it should be shared with credit bureaus.