Finance Minister Pranab Mukherjee on Tuesday asked banks to tap the vast opportunity provided by the semi-urban and rural markets by converting savings in these areas into financial assets.
"I advise banks to transform savings from the semi-urban and rural markets into financial assets through effective financial inclusion," Mukherjee told the chief ministers of Northern states and PSU bank heads here.
The Finance Minister said the financial sector is growing at a fast pace and provides growth opportunities unparalleled and unmatched by the mature financial markets around the world.
He said with the improvement in banking technology, efforts to spread banking activities to all will increase the customer base of banks.
"Financial inclusion initiatives will strengthen financial deepening," Mukherjee pointed out. Mukherjee said as of today only 37.2 per cent of bank branches in the country are in rural areas and only 40 per cent of the population have bank accounts.
He said there were 19,141 areas with population above 2,000 as per the 2001 Census that did not have banking facilities in the Northern states. The Centre has set a target to provide banking facilities to areas with population above 2,000 by March 2012,the Finance Minister said, adding the credit-deposit ratio of the Northern states except that of Chandigarh is not satisfactory against the benchmark of 60 per cent.
The Finance Minister also asked the states, which are signatories to the revival package for the short-term cooperative credit structure, to take up reform measures required to be put in place to avail of the Central funds. "Punjab and Uttrakhand have not yet made the required amendments to their State Cooperative Societies Acts. I would request them to take up this task," Mukherjee said.
The Finance Minister also asked the chief ministers to regularly review the progress of the Centrally-sponsored schemes to take the desired benefits to the common man.
Mukherjee said implementation of the Aam Admi Bima Yojana and Swavalamban or the contributory pension scheme, are priorities of the Centre.
