RBI panel recommends setting up of specialised banks

RBISpecialised banks should be set up to cater to low income households and to ensure that all citizens, above the age of 18, have bank accounts by 2016, an RBI panel has recommended.

Ex-ICICI Bank executive director Nachiket Mor-headed panel was formed by Raghuram Rajan on the day of his taking over as the governor of the central bank.

The Mor report said, "By January 1, 2016 each resident, above the age of 18, would have an individual, full-service, safe, and secure electronic bank account."

The penal also recommended that the facility for withdrawal, payment and deposit should be established within a fifteen-minute walking distance across the country.

It also suggested that the government should have a relook at the farm sector credit activities, and stressed on the need to put an end to practices of interest subventions and loan waivers.

The report added that `Payments Banks' should be set up to provide payment services as well as deposit products to small businesses and low-income families with a maximum balance of Rs 50,000 a customer. Minimum capital requirement for setting up these specialised banks has been pegged at Rs 50 crore, which is just one-tenth of minimum capital requirement of Rs 500 crore for full-service bank.