Recommending sweeping changes in the banking structure, an RBI panel today suggested setting up of specialised banks to cater to low income households to ensure that all citizens have bank accounts by 2016 - the recommendations were issued by a panel set up by RBI Governor Raghuram Rajan soon after he joined office in September and is headed by veteran banker and ex-ICICI Bank executive director Nachiket Mor to suggest steps for promoting financial inclusion.
It also suggested that facility for withdrawal, payment and deposit should be set up within a 15-minutes walking distance anywhere in the country.
"By January 1, 2016 each resident, above the age of 18, would have an individual, full-service, safe, and secure electronic bank account," Mor said in a report by the Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households.
The panel advocated setting up of 'Payments Banks' 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.
Permission to banks for pricing farm loans below base rate should be withdrawn, the Mor report said.
It also suggested that Aadhaar card should be used automatically opening a bank account.
RBI is currently sifting through the application of 25 companies to get into the banking fray for which one of the key eligibility criteria is their vision for financial inclusion.
The Mor panel report said there is a need for relook at the farm sector credit activities and suggested abolition of interest subventions and loan waivers.
The government should rather distribute the benefits directly to farmers, it said, adding that the banks should do away with the system of lending below their respective base rates to the farm sector.
Among the slew of changes on the regulatory front, it has made a case for gradual abolition of the statutory liquidity ratio (SLR), or the percentage of deposits invested in government bonds; raising the priority sector lending limit to 50 per cent, from the current 40 per cent, and allowing non-deposit taking NBFCs to work as business correspondents.
The Mor panel has set January 1, 2016 as the deadline for targets including access to formal credit as well as investment and risk management products at reasonable charges.