Page 8 - Banking Finance October 2025

RBI CORNER

credit grew 30-fold, the all-India aver- average deposits in Pradhan Mantri RBI plans reforms to boost
age growth was 41-fold. Jan Dhan Yojana (PMJDY) accounts
On the deposit side, rural areas saw a surged 3.7 times over the past decade, credit, lower intermedia-
20-fold rise compared to the national rising from Rs. 1,065 in 2015 to Rs. tion costs
average of 28 times. Urban areas fared 4,768 as of August 2025. The scheme RBI Governor Sanjay Malhotra an-
better, but even their growth trailed now has over 56 crore accounts with nounced plans to expand bank credit
metropolitan centres, where deposits deposits totalling Rs. 2.68 lakh crore. to productive sectors and reduce the
increased 36 times.
Finance Minister Nirmala Sitharaman cost of financial intermediation. The
The shift aligns with demographic said 67% of these accounts are in ru- central bank aims to implement Basel
trends. World Bank data shows India's ral/semi-urban areas and 56% are held III reforms on risk and capital by April
urban population rose from 28% in by women, highlighting financial inclu- 1, 2027.
2000 to 37% in 2024, while rural share sion. PM Modi lauded PMJDY's role in
declined to 63%. Credit risk and Expected Credit Loss
giving people dignity and financial (ECL) draft guidelines will be released
Experts point out that credit-deposit empowerment. shortly. The slowdown in non-food
ratios rose from 56% in 2000 to 80% in
The scheme has also facilitated Rs. 6.9 credit to 10.2% in June 2025-down
2025, yet rural segments remain
underserved. Banker V Viswanathan lakh crore in DBT credits in FY25 and from 13.8% a year ago-has prompted
noted that retail credit expansion in cit- boosted digital adoption, with RuPay RBI to act, as all four segments (agri-
ies explains the urban skew, urging cards, PoS machines, and UPI contrib- culture, industry, services, personal
banks to improve rural banking penetra- uting to over 22,000 crore digital loans) showed slower growth.
tion for balanced financial inclusion. transactions in FY25 alone. Minister Basel III norms will enhance risk cov-
Pankaj Chaudhary added that 2.7 lakh erage, increase capital adequacy, and
Jan Dhan deposits grow gram panchayats are part of an out- improve disclosure standards.
reach campaign for account opening,
3.7x over 10 years; PMJDY Malhotra also stressed strengthening
re-KYC, and social security enrolment, internal ombudsman mechanisms and
completes 11 years aiming to bring banking to every door- the RB-IOS scheme for faster grievance
The Finance Ministry reported that step. resolution.

Calling on the private sector to boost
Urjit Patel appointed IMF Executive Director amid investment, Malhotra said both banks

controversy and corporates are financially strong
and should drive the next growth
Former RBI Governor Urjit Patel has been appointed as Executive Director
at the International Monetary Fund (IMF) for a three-year term. The ap- cycle. RBI will also streamline policy
pointment was approved by the Appointments Committee of the Cabinet. approvals, giving management more
autonomy in routine matters.
Patel replaces Krishnamurthy Subramaniam, whose tenure was cut short
due to allegations linked to improper promotion of his book, India@100,
using state-run bank platforms. Subramaniam had nearly six months left in
his term when he was removed. Join
Patel, who had previously resigned from the RBI amid policy disagreements Online Certificate Course on
with the government, also served as vice president at the Asian Infrastruc-
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The move positions India with an experienced central banker at the IMF, For details please visit
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8 | 2025 | OCTOBER | BANKING FINANCE