Former Financial Services Secretary D K Mittal emphasized the crucial role of small finance banks (SFBs) in enhancing financial inclusion in India. Since 2014, the Reserve Bank of India (RBI) has mandated SFBs to open 25% of branches in unbanked rural areas and allocate 75% of loans to priority sectors. Recently, the RBI invited eligible SFBs to apply for universal banking status. Mittal suggested easing certain restrictions on SFBs, such as allowing co-lending and securitization, to help them better serve the financially excluded.
Making Small Finance Banks More Inclusive: Easing Restrictions Could Help
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