by them are disaggregated and percolate down to the branch level so as to ensure the involvement of all the stakeholders in fi efforts and also to ensure uniformity in the reporting structure under fips. the focus under the new plan is now more on the volume of transactions in the large number of accounts opened. a brief of the performance of banks under fip up to march 31, 2014 is : i ) the number of banking outlets has gone up to nearly 3, 84, 000. out of these, 1, 15, 350 banking outlets were opened during 2013 – 14. ii ) nearly 5, 300 rural branches were opened during 2013 – 14. out of these, nearly 4, 600 branches were opened in unbanked rural centres ( tier v and tier vi centres ). iii ) nearly 33, 500 bc outlets were opened in urban locations during 2013 – 14 taking the total number of bc outlets in urban locations to 60, 730 as at the end of march 2014. iv ) more than 60 million basic savings bank deposit accounts ( bsbdas ) were added during the 2013 – 14 taking the total number of bsbdas to 243 million. v ) with the addition of 6. 2 million small farm sector credits during 2013 – 14, there are 40 million such accounts as on march 31, 2014. vi ) with the addition of 3. 8 million small non - farm sector credits during 2013 – 14, there are 7. 4 million such accounts as on march 31, 2014. vii ) nearly 328 million transactions were carried out in bc - ict accounts during 2013 – 14 as compared to 250 million transactions during 2012 – 13. 8. as you all know, greater impetus to the financial inclusion plans has since been received through the prime minister ’ s jan dhan yojana. under this programme, in a short span of seven and a half months, a world record breaking achievement in the form of opening jdy accounts for 14. 71 crore persons as at end march 2015 has been accomplished. need for more banks & differentiated banks 9. while thus the financial inclusion efforts through the existing set of banks have been continued, the reserve bank is conscious of the position that these may not be adequate to speed up the process and achieve the goals early. a govt of india ’ s high level committee on financial sector reforms headed by dr raghuram rajan submitted in 2008 its report titled “ a hundred small steps ”. among its various recommendations, the committee recommended that there is

welfare measures of the government. implementing such obligations would become difficult through differentiated banks. therefore, to ensure participation of these banks in the developmental bis central bankers ’ speeches needs of the economy, appropriate modifications may have to be set keeping in view the nature of the business model. 43. accordingly, for small finance banks we prescribed a higher level of priority sector lending requirement at 75 %, as the very purpose is financial inclusion. for payments banks, as they will not have lending activities, we have ensured their participation in development by prescribing 75 % investment in government securities. elimination of regulatory arbitrage 44. as universal banks are permitted to do all or any of the activities mentioned in section 6 of banking regulation act, 1949, regulating the universal banks is easier for the regulator as the regulations could be principle based and common to these banks. however, once the differentiated banks are licenced, there would be a need for having a different regulatory and supervisory approach specific for such banks depending on the specialization. it also needs to be ensured that there is no scope for regulatory arbitrage across different types of banks. multiple regulations and complexity in regulations 45. also, there may be a need for more types of regulations for differentiated banks because of the different products lines, service offerings, clientele, areas and modus operandi of doing business. multiple regulations need to work in tandem to ensure effective regulation. further, there would be increase in complexity due to various types of banks and the different regulations applicable to each type of specialized category of banks. the regulatory and supervisory resources would have to be reoriented to ensure that effective regulatory and supervisory oversight is put in place. resolution regime for banks 46. more number of banks may mean more number of failures. it is a big risk in licensing of differentiated banks. however, as noted by the hlcfsr, failure of a few small banks may not have systemic consequence. further, the resolution regime is being strengthened. conclusion 47. there is enormous unmet potential demand lying in the rural areas and other unbanked centres which needs to be tapped. to tap this unmet demand for financial services, it is felt that it is worth experimenting on new types of institutions for financial inclusion. however, in a country like india where there exists differentiated markets and consumer groups, the concept may have to be contextualized according to the needs of the customers. as regards the health of the differentiated banks, there is a need for creating a balance between long