Make sense

Shankkar Aiyar writes:

• India is doubtless the home of paradoxes. It has arguably the largest number of banks and the lowest level of financial inclusion. The RBI informs us that there are 33 foreign banks, 21 private sector banks, seven new private sector banks, 20 nationalised banks, six banks of SBI and its associates…not to mention a host of cooperative institutions. And yet over 50 per cent of the households find themselves outside the formal banking and financial system, and 73 per cent of farmers have no access to formal credit. Is it then the claim of the government that new banks and indeed corporate houses will deliver what the existing pantheon of 80 banks and over 1,000 cooperative institutions are struggling to achieve?

• The very obvious need is for more branches or access to banking services. If financial inclusion is the stated objective, why has the policy shut out public institutions like the Life Insurance Corporation and India Posts which have been clamouring for banking licences? Indeed, if there is one organisation which can deliver access, geographical reach and inclusion, it is the India Posts which has over 155,000 offices of which 1,39,000 are spread across rural India. Yet, India Post has been shut out of the process of expanding banking and delivering financial inclusion.

It makes sense to argue like this but the services delivery is terribly poor in post offices. I have experienced all kinds of non senses in vising post offices for years. Unless, the post office system takes help of technological development it cannot provide any kind of services with cost effective.