ECONOMY

Finance Ministry Asks Banks to Increase Credit Flow to Aspiring Districts

Banks were instructed that at least one bank should be present within a radius of 5 kilometers of every village.

On Friday, the finance ministry asked state banks to further increase credit penetration in all 112 desirable districts across the country and ensure that all inhabited villages have access to bank outlets within a 5 km radius.

At a meeting in New Delhi, Financial Services Secretary Minister Vivek Joshi reviewed the progress of the Targeted Financial Inclusion Intervention Programme (TFIIP) related to aspiring districts. The meeting was attended by lead district managers from these regions and the convenors of the State Level Bankers Committees (SLBC).

According to a statement from the finance ministry, banks have also been asked to organise financial literacy camps in villages with the help of the Panchayati Raj Institute to raise further awareness about various financial inclusion schemes. The meeting also discussed a programme of rewards and recognition for districts and SLBCs that do well in this area.

The meeting was attended by NITI Aayog, Panchayati Raj, and senior officials from the financial services sector.

The move comes at a time when credit offtake is ramping up rapidly. Non-food bank credit rose 17.6% year-over-year in November, up from 7.1% a year earlier. According to the latest RBI data, industrial credit growth accelerated to 13.1% in November, up from 3.4% a year earlier. The latest effort aims to ensure less developed regions are included in the credit boom.

Prime Minister Narendra Modi’s Aspirational Districts Programme, launched in January 2018, aims to transform 112 of the country’s least developed districts. The scheme envisions coordination between central and state authorities to achieve this.

With states as critical drivers, the programme focuses on each region’s strengths, identifying low-hanging fruit for immediate improvement and measuring progress by ranking areas monthly.

The ranking is based on progressive progress across 49 key indicators across five broad socioeconomic themes, including health and nutrition, education, agriculture and water, financial inclusion and skills development, and infrastructure.

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