It is a good news, no doubt but how far the commercial banks would succeed in running those retail outlets in the form of branches in unbanked villages is a million dollar question in view of the mounting NPAs in rural branches so far due to poor recovery of dues from the borrowers. Well for the present due to pressure from RBI the banks are required to open at least one branch in the villages for every three branches being licensed by RBI as per the new norms. Wish them best of luck.
Otherwise as a well-wisher I have had been pleading for small bankers in rural areas from among the traditional money lenders only with strict norms and riders so that the overhead costs can be kept very minimum with more scope for better recovery percentages. The RBI nearly followed my thesis in 2006-07 but the same was abandoned due to the discouraging advice given by the so-called advisors to the state government. The top men in the government take advise invariably from the inexperienced and impractical officials with the result no innovative ideas get the support from the policymakers at crucial times even if one has to suffer under the illusion of illustrious achievements. That is the fate of the system prevalent in the country now.
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