SCBs’ credit as a per cent of GDP fell to 50.99% in FY20 from 51.51% in FY19: RBI data
In this regard, Das observed that credit bureaus and the proposed Public Credit Registry (PCR) framework are expected to improve the flow of credit as well as credit culture.
As per RBI data, scheduled commercial banks’ credit as a per cent of GDP came down to 50.99 per cent in FY20 from 51.51 per cent in FY19.
“India, with a large section of population in the working age group, is already the third-largest economy in the world in terms of purchasing power parity and is aiming to become a $5-trillion economy.
“…Among all the prerequisites for achieving demographic dividend and accelerated growth, quality of human resources, greater formalisation of economy, a higher credit-to-GDP ratio and greater financial inclusion are the differentiating factors that would elevate our economy to the desired level,” Das said at a webinar organised by the National Council of Applied Economic Research.
The Governor underscored that financial inclusion in the country is poised to grow exponentially with digital-savvy millennials joining the workforce, social media blurring the urban-rural divide, and technology shaping policy interventions.
“Going forward, harnessing the near-universal reach of bank accounts across the length and breadth of the country, there needs to be greater focus on penetration of sustainable credit, investment, insurance and pension products by addressing demand side constraints with enhanced customer protection,” he said.
Das said the interventions in financial education would have to be customised (local language and local settings) keeping the different target audience in mind.
“The scaling up of CFL (Centre for Financial Literacy) project across the country at the block level would be the cornerstone of community-led participatory approaches in our journey towards greater financial literacy,” he said.
The Governor felt that technology, though being a great enabler, can also lead to exclusion of certain segments of society.
He emphasised that it is imperative to build trust in formal financial services among the hitherto excluded population.
“Adequate safeguards need to be reinforced to address the issues of cyber security, data confidentiality, mis-selling, customer protection and grievance redress through appropriate financial education and awareness.
“These cast great responsibility on financial education providers,” the Governor said.