ASSOCHAM moots proposal for modification in the dispensation form the ATM machines with a view to provide sale of other financia

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ASSOCHAM has mooted a proposal for modification in the dispensation form the ATM machines with a view to provide sale of other financial products like insurance, mutual funds.

In a note to the government, ASSOCHAM has, however, stressed the need for establishing an apex Micro Financial Institution to provide uniform guidelines, regulate and ensure good corporate governance standards for fair and equitable dispensation to all stake holders.

The Chamber has anticipated that the credit requirements of the MFI may touch 1 lakh crores in the next 5 years with the government accelerating efforts through Commercial Banks and MFI. The concept of doling out subsidy to almost all the sectors where physical assets are seldom built up needs to be converted to credit dispensation at reduced rate of interest. This will create and add momentum to sustained employment generation and in the long run, bring down, subsidy burden appreciably.

The Government must clearly define the policy regarding expanding branch network and business correspondent modal so that more and more Un-banked areas are covered for attending full Financial Inclusion. Each commercial bank should be assigned a specified area for speeding full financial inclusion. This should be a time bound exercise.

The Chamber President Dr. (Mrs.) Swati Piramal said the proposed policy for issuing banking licenses must ensure that the new entrants are entrusted to open more branches / Business Correspondents in Un-banked rural centers.

The suitable technology platform be suggested to roll out various cost effective financial products efficiently and effectively. Usage of Biometric smart cards/Mobile technology to increase the outreach and to reach the Last Mile Villages.

The microfinance sector needs to be regulated to enforce transparency and fair play so that the ultimate objective of providing small ticket size loans to the rural populations at affordable interest rate of interest. This will bring healthy competition among the players and bring down transaction cost for the loan beneficiaries.

The share of total bank credit to micro sector may be increased and strict follow up and monitoring mechanism be placed for effective control. The interest may be subsidized in lieu of extending pure subsidy.

A special set of corporate governance norms be identified for microfinance institutions, so that their healthy growth and interest is widely accepted.

News Source : ASSOCHAM moots proposal for modification in the dispensation form the ATM machines with a view to provide sale of other financial productsWednesday, December 01, 2010