##bc ) which i referred to earlier is mandated to review the flow of credit in each district with reference to the cdr and draw up a special, monitorable action plan for districts with cdr of less than 40 %. if the cdr of ner is low, what it means is that savings of people in the region are going outside to finance investment elsewhere. this is unfair and strictly inadvisable. the savings in the ner should be used to finance investment here in the region. this requires responses both from supply and demand sides. our efforts have so far largely focused on the supply side. we must do much more to generate demand for credit. the state governments and the banks should work in partnership in this regard. the reserve bank will be happy and willing to promote this partnership for raising the absorptive capacity of states for institutional credit. 5. indian government is now encouraging trade with asean. but unfortunately there are very limited bank branches along border. the existing branches are not sufficient to meet the demand of the customers. will rbi take any step? as i have already pointed out earlier, at the policy level, we have been encouraging expansion of bank branches in the ner. if the state governments come forward with infrastructure development and other facilities along the border, the reserve bank will be bis central bankers ’ speeches happy to work with them to improve the presence of banks along the border. perhaps, the ne council should come up with a viable plan in this regard. 6. customers often complain about poor atm service. existing atms are inadequate to meet the demand as volume of business is increasing day by day. what is your advice to the banks? scheduled commercial banks are no longer required to take reserve bank ’ s permission to install off - site / mobile atms. as at end march 2011, there were close to 75, 000 atms across the country. but you are right. with just about 1800 atms, the share of the ner in the total number of atms is low. you must, however, appreciate that north - east is a difficult terrain. there are frequent power failures, and problem of digital connectivity and security. lack of infrastructural facilities is a major problem restricting the spread of banking, including atms in the area. nevertheless, at the policy level, we have taken some measures to enhance access of banking services as a whole to north east region. these include : to improve branch network in the region, domestic scheduled

duvvuri subbarao : financial inclusion in the north - eastern region ( ner ) and other issues text of interview of dr duvvuri subbarao, governor of the reserve bank of india, with assam tribune, published on 29 november 2011. * 1. * * rbi has introduced financial inclusion programme to cover more and more people under the banking system. though most of the banks have been carrying out this programme, the progress is still slow. are you happy with the progress of the financial inclusion programme in the region and what is your best possible advice to the banks? please allow me to give you the context before answering your specific questions. for the last several years, the reserve bank has been aggressively pursuing financial inclusion on the belief and understanding that financial inclusion is a necessary pre - condition for inclusive growth. development experience over the last sixty years from around the world clearly evidences that what the poor want is not doles, but opportunity to improve their incomes and thereby their quality of life. financial inclusion is a necessary condition for providing such an opportunity to the poor not only to raise their incomes but also to insulate their families against income shocks and meet emergencies such as loss of job, illness or death in the family. both the government and the reserve bank have taken several initiatives to further financial inclusion. we have liberalized branch licencing – domestic commercial banks are now free to open branches anywhere they like in towns and villages of up to 100, 000 population. banks are also required to ensure that at least a quarter of the branches they open are in villages with a maximum population of 10, 000. to provide an incentive to banks, the reserve bank has also advised them that their performance in financial penetration will be a criterion in giving them authorization for branches in metros and other large urban areas. there is a road map for providing banking access to all villages in the country with population of over 2000 by march 2012. across the country, about 74, 000 villages have been identified as falling within this category. banking access will be provided either by opening a “ brick and mortar ” branch or through the business correspondent model – although we are encouraging banks to set up as many “ brick and mortar ” branches as possible. there are 3250 villages in the north - eastern region ( ner ) falling into this category of over 2000 population with as yet no banking facility. of these, only about 1031 villages were covered by end september 2011. there may have been further progress since