Banks are working on setting up 'Rural ATMs' for dispensing currency notes of smaller denominations, RBI's Deputy Governor R Gandhi said Monday.
Hyderabad: Banks are working on setting up 'Rural ATMs' for dispensing currency notes of smaller denominations, RBI's Deputy Governor R Gandhi said Monday.
"We have encouraged banks to find a solution for bringing in rural ATMs. Typically in city or urban centric ATMs, they will disburse high denomination notes (Rs 1,000 and Rs 500), whereas in rural areas, people will be requiring more of lesser denomination," he said in response to a query in Financial Sector Conclave (FINSEC - 2014) organised by Ficci.
"So, banks will have to find an appropriate technology solution for a different type of ATM to care for the needs of the rural people. Banks are working on that. Hopefully they will come forward to put ATMs in rural areas (with this new technology)," he said.
The Reserve Bank of India (RBI) has initiated a move to allow banks to mobilise all unclaimed and unused deposits to form a fund that would be utilised for educating customers about banking and other related aspects, he said.
On the microfinance industry in Andhra Pradesh and Telangana, Gandhi said he expects normalcy to return in future.
"To restore normalcy is not easy. We are struggling, even though the episode happened in 2008-09. It is more than five years still the normalcy has not been fully restored. Slowly, the MFIs are finding their way. Growth is there. But not to the extent you would have liked it to happen. Several regulatory supporting have been put in place," he opined.
The Microfinance business in Andhra Pradesh (before bifurcation), which was considered the largest market for the sector, collapsed after the AP Microfinance Ordinance was implemented on October 15, 2010 and subsequently made into an Act in the wake of a spate of suicides by borrowers, allegedly due to coercive recovery practices by the MFI agents.
MFIs could not collect more than Rs 5,000 crore microfinance loans given to individual borrowers due to some of the rules imposed in the Bill.
Earlier in his address, Gandhi said southern region tops in financing to Self-Help Groups (SHGs). The readiness, the enthusiasm and the dedication and discipline of these women SHGs are backbone of their success.