KOCHI: The Reserve Bank of India (RBI) has advised banks to utilise the 1.39 lakh post offices in the country to ensure credit flow to rural areas as part of its efforts to achieve financial inclusion.

In the first phase, the RBI had advised the Indian Banks' Association to circulate among its members a scheme to enable banks in Maharashtra to purvey rural credit in association with post offices, said RBI Executive Director V.S. Das here recently.

If this scheme was carried out successfully in Maharashtra, it would be extended to other States, in consultation with the Department of Posts, said Mr. Das, who was inaugurating a national conference here on financial inclusion.

He said the RBI looked forward to the findings of the high-power committee on financial inclusion, headed by C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister. The committee was expected to submit its report by November.

Mr. Das called for a change in attitude and approach to achieve financial inclusion. He said that financial inclusion should be pursued "with a high degree of patriotic zeal in order to give an opportunity and an enabling environment to the poor and the neglected for their uplift."

He said, "Promoting financial inclusion should be seen as an important part of a wider drive towards social inclusion." This was of great significance in India, where vast sections of society were engaged in unorganised sectors.

He also warned that to be excluded might mean higher cost of transactions, missed opportunities and unemployment leading to even violence in extreme cases. The RBI official defined financial inclusion as delivery of banking services at an affordable cost to the vast sections of disadvantaged and low-income groups, who tend to be excluded.

The benchmark often used for estimating the degree of reach of financial services to the population of the country was the quantum of deposits accounts (current and savings) held as ratio to the adult population, he said. This figure for India was 59 per cent in March 2004 based on the 2001 Census figures. The ratio for Kerala was 89 per cent, while it was 33 per cent in Bihar and 21 per cent in Nagaland and 27 per cent in Manipur.

The northern region comprising Delhi, Haryana and Chandigarh had a high coverage ratio of 84 per cent.

A recent survey in the U.K. showed that 92 to 94 per cent of the population in that country had either a current or savings account.

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