Dwelling on the importance of financial inclusion, Dr.Subbarao said financial inclusion was good for the poor, the banks, the government, and the economy. While appreciating the large scale opening of accounts by households, he pointed out that the real test was how many of these households who had bank accounts actually used them.
To ensure that they did use their accounts, the poor should have the facility for credit, insurance, and remittance through these accounts, Dr. Subbarao said. Dispelling the myth that the poor did not need financial planning, he said, ‘Poor people need much more financial planning and are also good at it’. He said policy makers needed to understand poverty to ensure financial inclusion in the real sense.
Dr. Subbarao further advised the students in particular to do some research work in villages to spread awareness among the people about how to operate the bank account.
Explaining the mandate of the Reserve Bank of India, Dr. Subbarao said monetary policy making was a challenge for all central banks, not just RBI. Consumers and investors needed low and steady inflation and as a public institution, RBI had to listen to the voice of the millions of poor people. Speaking on RBI’s responsibility to issue currency, he stressed that it also had the role of protecting the value of the currency.
Dr. C.H. Hanumantha Rao, the Chancellor of the University who presided over the event, appreciated Dr. Subbarao for explaining such a complex subject so lucidly. Dr. J. Mahender Reddy, Vice Chancellor, in his welcome address highlighted the contribution of N.J. Yasaswy in the establishment and growth of the ICFAI institutions. He noted Dr. Subbarao’s unique role in helping the country mitigate the impact of the 2008 global financial crisis during his stint as Governor of RBI. He pointed out that Dr. Subbarao was also credited with the reorientation he provided to the process and content of the monetary policy formulation consistent with India’s rapid integration with the rest of the world.
The event was webcasted live through http://icfaiuniversity.in/webcastURL to all the 11 Universities and 6 ICFAI Business Schools Campuses of the ICFAI Group. The lecture can be followed by anybody from anywhere.
The ICFAI Foundation for Higher Education is a Deemed University under section 3 of the UGC Act, 1956, with its campus in Hyderabad. The University offers the BBA, MBA, PhD, B.Tech., and BBA-LLB (Hons) programs. It has a student strength of around 3000 and a faculty strength of over 200.