India compares poorly with Asian peers in fin inclusion: RBI

MUMBAI: India compares poorly with OECD as well as many of its Asian peer group countries with respect to financial inclusion, the Reserve Bank today said.

Domestic banks' performance in meeting their agricultural and weaker sections sub-targets was relatively weak in 2009-10, the apex bank said.

However, they were able to meet their overall priority sector target, it said.

A welcome development in the recent years has been a steady increase in the penetration of bank branches and ATMs, the RBI said in its Report on Trend and Progress of Banking in India 2009-10, released here.

"More importantly, the increased penetration of both branches and ATMs could be seen across rural India," the RBI said.

Micro-finance showed further growth in 2009-10, particularly under the MFI-linkage programme as compared to the SHG-Bank linkage programme, it said.

The report highlighted the near completion of computerisation and an increase in the extent of adoption of Core Banking Solution (CBS) in public sector banks in FY 10.

Banking sector needs to support the growth momentum in the economy while giving due attention to the asset quality and prudent provisioning to balance emerging returns and risks.

"Further, banks need to step up efforts towards financial inclusion using the instrument of scale-neutral technology as this would help in bringing the vast population into the ambit of formal finance and also boost future economic growth coupled with equity," it said.