Concerned over rising incidents of farmer suicide, Prime Minister Narendra Modi on Thursday nudged banks to be considerate in giving and recovering loans from poor saying banks would not shut by helping them.
"As RBI celebrates 80 years, can we think within ourselves that we will expand our banking sector so much that farmers would not have to commit suicide because of huge debt burden.
“Can we not dream of this?. . . I do not believe that by helping poor a bank will become insolvent," he said.
Farmers' plight should ‘shake the conscience’ of the banking sector, he said, addressing the 80th anniversary celebrations of the RBI where Finance Minister Arun Jaitley, Maharashtra Chief Minister Devendra Fadnavis and RBI Governor Raghuram Rajan were also present.
"Our farmers commit suicide. The pain of this should not only be restricted to newspapers and TV screens.
“When farmer dies, does it shake the heart of banking sector? Because of taking loan from money lender, he has to face death," Modi said.
He also asked the Reserve Bank to prepare a 20-year road map for financial inclusion and suggested that the Indian currency should be printed using indigenous paper and ink.
Lauding the efforts of Reserve Bank in improving macroeconomic conditions in the last eight decades, Jaitley said that the central bank's professionalism has served the country well.
Speaking on the occasion, Rajan cautioned the banks against excessive lending to infrastructure sector projects as it may impact their financial stability.
Appreciating the role played by RBI over the last 80 years, the Prime Minister complimented Rajan for his grasp and clarity on economic issues.
"There is lot of similarity between the thinking of RBI and the government," he said while referring to bi-monthly meetings with the Rajan.
"Rajan is a good teacher who explains the issues in just three-four slides," Modi added.
Elaborating on the issue of financial inclusion, Modi urged banks to come up with creative financial inclusion instruments to help prevent farmer suicides, adding that providing assistance to farmers would also help in promoting environment friendly initiatives.
The Prime Minister also called upon the bankers to extend credit to resource rich eastern states.
The banks, which take pride in funding green initiatives, should also provide funds to farmers for planting trees which is as important as reducing carbon emission by factories, he said, adding: "I come as a representative of the poor, underprivileged, marginalised and tribals. . . I seek on their behalf and trust you will not disappoint me."
Modi further said that RBI, which will be completing 100 years in 2035, should work on the theme of financial inclusion and prepare a road map for achieving it.
The milestones for achieving financial inclusion could be 150th birth anniversary of Mahatma Gandhi in 2019, 75th year of Independence in 2022, 90th anniversary of RBI in 2025 and 100 years of RBI in 2035, he said.
"These are four important dates. . . We can create a road map for financial inclusion," Modi said, adding that it should not remain a government programme but should become ‘an article of faith’.
He said the success of the Pradhan Mantri Jan Dhan Yojana and the Direct Benefit Transfer of LPG subsidy had shown the potential of the enormous role that the banking sector can play in ensuring financial inclusion.
Along with economic and social parameters, there is also a need to think of a geographical parameter as well for financial inclusion, he said, adding that eastern India had immense economic potential, and the banking sector should recognise and plan for this.
As part of his 'Make in India' initiative, Modi urged RBI to take the lead in ensuring that India starts to manufacture the paper and ink that are used to print currency notes.
Image: Prime Minister Narendra Modi addressing at the Financial Inclusion Conference of RBI, in Mumbai on April 02, 2015. Photograph: Kind courtesy, PIB
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