The RBI had a word of caution on Sunday for those eagerly awaiting the new banking licence. If you are looking for raking in big moolah, better reconsider it, since banking is not meant to make big profits, RBI deputy chief KC Chakrabarty said.
He said people feel if banks generate profit, they are efficient. But if the banks make too much profit, economy will become insufficient. If banks make too much money, then customers are losing money. So, banks making too much money is very danger.
Chakrabarty asked the banks not to do mere lip service but get into actual action on the financial inclusion initiative. Under the initiative, 15 crore accounts were opened, but only three crore transactions have taken place. What happened to the remaining 12 crore? asked Chakraborty.
Till now, because of enthusiasm, we are making more publicity. Don't do lip service alone on financial inclusion, he told the bankers. The banks have to work together on a delivery model and make it perfect with the help of technology.
The unbanked masses constitute a unique but important stakeholder group for banks, even though they may not be bank customers. Meeting the expectation of this group through financial inclusion efforts presents a huge opportunity for banks, he said.
There is no one-size-fits-all financial inclusion strategy or approach, It is important that banks recognise three necessary and sufficient conditions that are required for maximising the benefits of financial inclusion efforts, including holistic approach to provision of financial services, not just credit or deposit alone, meeting the needs of small firms and focusing on segments of population excluded by gender or geographical remoteness.