‘Financial gap between rich and poor needs to be bridged’

Subrata Gupta
NABFINS is working on bridging the gap between the rich and the poor. It is a challenge and NABFINS is trying to help people by giving credit. However, this is neither a one institution’s job nor a fight against poverty to be over in a day, says Subrata Gupta, Managing Director, NABARD Financial Services Ltd. in conversation with Elets News Network (ENN).

You have been part of NABARD since 1985. What changes have you seen in terms of technology over the period of time?

If I start from what it was in 1985 and what it is now, it’s a sea change which perhaps today’s younger generation will not be able to fathom. I will give two examples which will indicate the kind of change technology has brought in the banking sector. I still remember my father sending me money when I was in the hostel from Kolkata to Ahmedabad. In those days such instruments were called upcountry instruments/ cheque. It would take at least 15 days for the bank to give credit to my account.

Today when I send money to my daughter, it’s just a few clicks on the mobile and money is there in her account! Thanks to digitisation and products like Immediate Payment Service (IMPS).


I remember in 1985, when I joined NABARD, I would take permission from my superior to go to the bank to withdraw the salary which generally took somewhere between 1-2 hours or even more special if it was a Monday.

We would draw money based on our estimate for the month in one go to avoid coming back again and going through the torture. And this was in a city like Mumbai. Today, I suddenly find myself in an awkward position if somebody asks for cash from me because either I don’t have the requisite change or I don’t have enough cash in my purse! Payment systems have changed so much that we cannot even fathom how easy our life has become.

Prior to this, you were handling the Department of Financial Inclusion and Banking Technology of NABARD. How exciting or challenging is your new role with NABFINS?

From Banking technology, I have moved over to Micro-finance. It’s a big change and to be frank it has been a great learning and unlearning experience. NABFINS works deep inside in rural areas where many of the technological developments we are talking about is not of much interest. The business of micro-finance is done by NABFINS which caters to providing financial services to the poor.

And this goes with our motto of “Balancing Business with Inclusion”. Even today deep inside Madhya Pradesh, there are groups who find it tough to take a loan of Rs 5000 per member, which many of us spend probably in one evening when we go out with our family to see a movie.

Bridging this gap is a challenge that we have to work on and NABFINS tries to help such people by giving credit. I can proudly say that NABFINS gives credit at the lowest rate in the Microfinance sector. However, this is not a one institution’s job nor is fight against such poverty to be over in a day.

You have spearheaded the entire project of implementing the core banking solutions across 201 District Co-operative Banks and State Co-operative Banks across 16 states and 3 union territories. What are the new projects you are currently working on?

NABARD did implement core banking solutions (CBS) in more than two hundred banks and the project is in its second term. NABARD did an action research project titled “Comprehensive Financial Inclusion” through five pilots in five regions which, based on the videos available on YouTube, shows the huge gap which still exists in financial inclusion if we only take the basics like Savings, Credit, Insurance, pension, and payments.

It also clearly brings out an approach which can be adopted for taking Financial Inclusion to the doorstep of every household in India. It also points out clearly to the gap which exists between urban and rural India. The Pradhan Mantri Jan Dhan Yojana (PMJDY), one of the biggest financial inclusion initiatives in the world, has helped several households to get an account through which they can now do the transaction as well as savings in a secure manner. I wish every eligible person has his/ her own bank account and the same is linked to the various government schemes relating to insurance and pension. This gap needs to be bridged.

How the present Government will impact the working role of NABARD Financial Services and other similar financial institutions?

The newly elected Government, I expect, will have a positive impact on the functioning of MFIs. The present government believes in direct benefit transfer rather than things like loan waiver which is good for the banking industry as such. I am sure Financial Inclusion will also get a boost under the present regime.


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