The Hindu : Business : A thought for the common man

Online edition of India's National Newspaper
Wednesday, Oct 26, 2005

Business

Business

A thought for the common man

Special Correspondent

Banks asked to offer `no frills accounts'

CHENNAI: The Reserve Bank of India (RBI) has signalled its policy of "inclusion'' or non-elitist approach by asking banks to make available a basic banking or `no frills' account with either nil or a low minimum balance requirement as well as charges that would make such accounts accessible to vast sections of the population.

"All banks are urged to give wide publicity to the facility of such a `no-frills' account so as to ensure greater financial inclusion", the mid-term review of the Reserve Bank of India's annual policy statement for 2005-06 said. The RBI has granted general permission to banks to issue debit cards in tie-up with non-bank entities.

With a view to facilitating capacity expansion and technological upgradation in the textile industry, the RBI has decided to allow banks to issue guarantees or standby letters of credit in respect of external commercial borrowings (ECBs) raised by textile companies for modernisation or expansion.

"Such applications would be considered under the approval route subject to prudential norms,'' it said.

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