Financial inclusion is the zeitgeist of the contemporary world; we can barely construct a successful society if we tended to get away from the trend. It is regrettable that our banks have had a rather unedifying record in terms of accepting the spirit of the time.

Anand Sinha, Deputy Governor of the RBI has said the hoi-polloi inhabiting the country’s semi-rural and rural areas is still unbanked and under-banked. The banks’ services are exclusive of this huge population.

In Mr Sinha’s view, the urban cooperative banks could play an important role in bringing the poor within the banking framework.  As the poor could barely access commercial banks, the UCBs could cover them.

According to the RBI report, there are over 97 thousand cooperative banks in the country, UCBs count nearly 2 thousand. Altogether, the cooperative banks are a crucial link in the situation and their further expansion would do a lot of good in terms of financial inclusion. It is significant that both Sinha and the Y.H.Malegam Committee have favoured  a greater  presence of UCBs in the areas that are yet to be  banked.

The RBI report adds all is not hunky dory with the rural cooperative banks though the PACS are financially rundown and their capacity to be inclusive is severely limited.  Also the cooperative banks have been terribly slow in spreading their network in the North-East.