Aizawl: RBI Governor Raghuram Rajan on Thursday welcomed Supreme Court ruling on use of Aadhaar card in more schemes and said it will help in financial inclusion drive and providing easy access to loans.
"The Supreme Court ruling today on Aadhaar card will be quite helpful, making us use it in banking services. It will make easier for financial inclusion," Rajan told reporters after the central bank's board meeting here.
With an UIDAI number, a person will be able to open a bank account as it will work as an identification document and will help in easier access to loans, he added. "UID will ensure that people will not get multiple loans from different places. We can make sure that it does not happen. This is an example on how we can make more lending possible," said Rajan, who was in the city for RBI's 554th Board Meeting.
The Supreme Court on Thursday permitted voluntary use of Aadhaar card for schemes like GNREGA, all types of pension schemes, PM's Jan Dhan Yojana and EPF. While modifying its earlier order restricting use of Aadhaar for PDF and LPG only, the apex court ruled that Aadhaar card scheme would be purely voluntary and not mandatory till the court decides the matter.
"What we need is responsible lending and responsible borrowing, and much of our effort on financial inclusion is on how to make that happen," Rajan said. The Governor said it is easy to get loans in the present system but the focus is on how not to make those bad loans.
"We have given enough power to banks to tackle NPAs. They must recognise, resolve and monitor future loans," Rajan said. He said small entrepreneurs and self-help groups can avail loans, but it should be taken care of that they don't fall in a "debt trap". Speaking about the meeting, Rajan said the board discussed about state of economy of India and also world economy. "We discussed regulations, ombudsmen and ponzi schemes. Wide variety of topics were discussed," he added.
Rajan also said that RBI is working with the Finance Ministry to increase capital infusion in the banks. "The government had announced this to be Rs 25,000 crore.
Some banks have got it and some will get it soon. It is almost done," he added. Talking about the NPAs, Rajan said RBI has given a lot of power to banks to recover bad loans.
"Going forward, we will have close look on assets. The banks have to recognise the bad loans, bring all stakeholders into the table to resolve those and effectively monitor it for future so that the loans don't become NPAs," he added.
On handling issues related to ponzi scheme, Rajan said states should enact effective laws to curb the menace and protect the interest of the depositors. Also, state level coordination committee, comprising law enforcement agencies, should meet frequently and intervene in the process.
When asked about banks not passing on the benefit of rate cuts, RBI Deputy Governor Urjit R Patel said that of the 75 basis point cut before September policy review, banks passed on 43 basis points on a weighted average basis. "Passing on of rate cuts on new loans is better than old ones. In the capital market, the pass through is one-to-one," he added.
Patel also said the government is reviewing the small savings rate and once this rate is lowered, further transmission of the rate cuts can happen through banks.
