Fi­nan­cial in­clu­sion key is­sue in mea­sure­ment: RBI

The Pak Banker - - Front Page -

KUALA LUMPUR

Dr K C Chakrabarty, Deputy Gov­er­nor of the Re­serve Bank of In­dia ad­dress­ing at the Bank for In­ter­na­tional Set­tle­ments-Cen­tral Bank of Malaysia Work­shop on “Fi­nan­cial in­clu­sion in­di­ca­tors” said the im­por­tance of fi­nan­cial in­clu­sion, based on the prin­ci­ple of eq­uity and in­clu­sive growth, has been en­gag­ing the at­ten­tion of pol­icy mak­ers in­ter­na­tion­ally.

Achiev­ing uni­ver­sal fi­nan­cial in­clu­sion is, in­deed, a global ob­jec­tive and has mul­ti­ple di­men­sions. While each ju­ris­dic­tion will, per­haps, evolve its own de­liv­ery model, we need to learn from each other and im­ple­ment what is suit­able in each con­stituency. The Irv­ing Fisher Com­mit­tee is en­gaged in sta­tis­ti­cal is­sues that are of in­ter­est to cen­tral banks world­wide. As we all know, Irv­ing Fisher was not only a cel­e­brated econ­o­mist who gave us the Fisher equa­tion of money and the the­ory of real in­ter­est rates, he was also a pioneer in the devel­op­ment of the the­ory of in­dex num­bers. He once ob­served one of my chief ob­jects has been to help make eco­nom­ics into a gen­uine sci­ence through care­ful and sound anal­y­sis, usu­ally car­ried out with the help of math­e­mat­i­cal meth­ods and sta­tis­ti­cal ver­i­fi­ca­tion.”2 I trust this work­shop will help pro­vide prac­ti­cal per­spec­tives on the crit­i­cal di­men­sions of mea­sur­ing the depth of fi­nan­cial in­clu­sion as also help stream­line data avail­abil­ity and re­lated is­sues. As the pro­gram struc­ture aptly notes, fi­nan­cial in­clu­sion prin­ci­ples and ap­proaches have as­sumed an in­creas­ingly ac­tive role at the in­ter­na­tional level in de­vel­op­ing new re­search agenda, set­ting stan­dards and pro­mot­ing best prac­tices to im­prove fi­nan­cial in­clu­sion. The fo­cus on fi­nan­cial in­clu­sion mea­sure­ments and data gaps, that this Work­shop seeks to achieve, is very much timely and im­por­tant.

The agenda of this work­shop is very ap­pro­pri­ate as cur­rently we lack re­li­able and gran­u­lar data on fi­nan­cial in­clu­sion, which re­stricts our abil­ity to fully gauge the ex­tent of ex­clu­sion and the ground-level im­pact of the ini­tia­tives be­ing un­der­taken. We need to work out ap­pro­pri­ate data struc­tures and as­so­ci­ated an­a­lyt­i­cal frame­works for ef­fec­tive pol­i­cy­mak­ing and the stan­dard­i­s­a­tion of var­i­ous ap­proaches at the na­tional, re­gional and global lev­els.

He said in or­der to ap­pre­ci­ate the mea­sure­ment and data needs, a broad un­der­stand­ing of the pol­icy ini­tia­tives is im­por­tant. Against this back­ground, I pro­pose to briefly fo­cus on: Ap­proaches to fi­nan­cial in­clu­sion – some in­ter­na­tional / na­tional ini­tia­tives, Con­cep­tual frame­work for mea­sure­ment and anal­y­sis of fi­nan­cial in­clu­sion, In­ter­na­tional ini­tia­tives in mea­sur­ing fi­nan­cial in­clu­sion and In­dian per­spec­tives.

The ori­gins of the cur­rent ap­proach to fi­nan­cial in­clu­sion can be traced to the United Na­tions

ini­tia­tives, 3 which broadly de­scribed the main goals of in­clu­sive fi­nance as ac­cess to a range of fi­nan­cial ser­vices in­clud­ing sav­ings, credit, in­surance, re­mit­tance and other bank­ing / pay­ment ser­vices to all “bank­able” house­holds and en­ter­prises at a rea­son­able cost.

The Report of the Cen­tre for Global Devel­op­ment (CGD) Task Force on Ac­cess to Fi­nan­cial Ser­vices ( Oc­to­ber, 2009) 4 has laid down the broad pol­icy prin­ci­ples for ex­pand­ing fi­nan­cial ac­cess, in­clud­ing in­sti­tu­tional mech­a­nisms, with par­tic­u­lar em­pha­sis on the need for en­sur­ing data col­lec­tion, mon­i­tor­ing and eval­u­a­tion.

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