Nachiket Mor Committee’s Report on Financial Inclusion

Nachiket Mor Committee on Financial Inclusion, which was constituted by the Reserve Bank of India (RBI) in 2013, submitted its report to the RBI on 7 January 2014. The report recommended sweeping changes in the banking

structure of India.
Most importantly it suggested setting up of specialised banks to cater to low income households to ensure that all citizens have bank accounts by 1 January 2016. It also suggested that facility for withdrawal, payment and deposit should be set up within a 15-minutes walking distance anywhere in the country.

Following are the important suggestions of Nachiket Mor Committee :

1. By 1 January 2016 each resident of India, above the age of 18, would have an individual, full-service, safe, and secure electronic bank account.
2. Every Indian resident should be issued an account at the time of receiving Aadhaar number by a bank.
3. Aadhaar card should be used automatically to open a bank account.
4. Facility for withdrawal, payment and deposit should be set up within a 15-minutes walking distance anywhere in the country.
5. ‘Payments Banks’ should be set up to “provide payment services and deposit products to small businesses and low-income households” with a maximum balance of Rs 50,000 per customer. These banks can be set up with minimum capital requirement of Rs 50 crore, one-tenth of the Rs 500 crore required for full-service bank.
6. Interest subsidies and loan waivers should be abolished. Instead govt. should transfer benefits directly to farmers.
7. Statutory liquidity ratio has outlived its utility for both Banks and NBFCs and eventually needs to be removed.
8. Banks should do away with the system of lending below their respective base rates to the farm sector.
9. All type of Insurance products should be made available to the poor at reasonable prices.
10. Bank interest rates should be over and above the prevailing rate of Wholesale Inflation
11. NBFCs (non-banking financial companies) should be appointed as agents of banks and their services should be taken in increasing financial inclusion

Who is Nachiket Mor?

He is a veteran banker of the country and is a former Executive Director (ED) of the ICICI Bank.