The conversation started with the regulator’s perspective on what’s next after the institutional infrastructure for pursuing the agenda of Financial Inclusion is in place, with bank branches opened, BC infrastructure, MFI operations, and Government policies like PMJDY. According to C. Rangarajan, the context of Financial Inclusion has been ever-changing and is ascribing different meanings at different times. While a lot has been done, the sector has still not reached the end with institutional innovation, there exist more possibilities. The focus of the government and regulators should be on making existing institutions and structures more effective.

During the fireside chat, Dr. C. Rangarajan also emphasized the continued relevance of a multi-agency approach nurtured over the past decades by the Government of India and the RBI and urged inclusive financing institutions to stay true to the spirit of their inception. Financial Inclusion cannot be seen as a single agency delivery model. The multi-agency approach encompasses the SHG movement, Urban cooperatives and Regional Rural Banks. The SHG movement was a substantial innovation, moving the focus of credit from men to women. After 1996 circular, the banks considered SHGs as part of their mainstream credit operations. SHGs changed the paradigm of banking. The importance of SHGs and MFIs must be ascribed to the people it is catering to and the average size and the purpose of loans.


The need of the hour is to shift the lending practices into a more robust system. Promoting retail loans is a promising option where there is a need for local players to be a part of the lending side ecosystem within a much resilient framework for lending practices. The customer base still harks back to traditional lending practices even if there are other financial instruments present. The point of contact and the lending infrastructure needs to be more user friendly and remotely accessible.

To watch the fireside chat, click here.