OREANDA-NEWS. May 20, 2011. The Central Board of Directors of the Reserve Bank of India met today at Agartala. Dr. D. Subbarao, Governor, Reserve Bank of India chaired the meeting. The Central Board members present in the meeting were: Shri Y. H. Malegam, Prof U.R. Rao, Shri Lakshmi Chand, Shri H.P. Ranina, Dr. A. Vaidyanathan, Dr. M. M. Sharma, Shri Sanjay Labroo and Smt. Shashi Rajagopalan as also Deputy Governors of the Reserve Bank Smt. Shyamala Gopinath, Dr. K.C. Chakrabarty, Dr. Subir Gokarn and Shri Anand Sinha. The meeting reviewed key economic, monetary and financial developments in the country.

The Central Board meets at least once every quarter. Apart from holding meetings in Mumbai, Chennai, Kolkata and one in New Delhi after the Union Budget and addressed by the Finance Minister - the rest of the meetings are held in other state capitals by rotation. The main function of the Central Board of Directors of the Reserve Bank is to provide overall direction to the Reserve Bank’s affairs.

The Reserve Bank opened a sub-office in Agartala on the eve of its Board meeting. Shri Manik Sarkar, Hon’ble Chief Minister of Tripura inaugurated the sub- office along with Reserve Bank Governor Dr. D. Subbarao. Shri Badal Chaudhary, Hon’ble Finance Minister of Tripura and senior officers of the state, banks and RBI were present. While opening the new office of the Reserve Bank of India in Agartala, the Chief Minister stated that the State government had been and would cooperate in every manner to ensure that banking access is made available to the people in the State. He, however, lamented at the low credit/deposit ratio of banks, low credit flow to agriculture, low number of bank branches and inadequate manpower in these branches in the State.

The Governor in his remarks pointed out that the Reserve Bank was sensitive to all the three issues and was taking appropriate steps to bring improvement in all the three areas. It had already decided to open its offices in all the North-Eastern States, he said and added that opening of an office in Agartala was a step in that direction. The Reserve Bank was also making efforts to enhance credit flow to the North-Eastern States. In the past few years, for instance, the Reserve Bank of India had announced a subvention scheme for opening branches in the North-East. Of the five branches which were agreed to be opened in Tripura, two branches were already opened and three more had been approved and would be opened as soon as security issues were resolved. He hoped that the issue would be resolved soon with the cooperation of the State government.

The Governor pointed out that for faster development of the region, it was equally important to increase its credit absorptive capacity. For this purpose, it was equally necessary to introduce bankable schemes and open financial literacy and credit counselling centres in the region. He added that educating the population about banking facilities would also help generate demand for bank services and products. He urged the State Government to include finance in school curriculum to enhance financial literacy in the state. He stated that the Reserve Bank had developed  material for this purpose which it would willingly share with the State government.

Earlier, Dr. D. Subbarao, inaugurated the Electronic Clearing System (ECS) by putting through the first transaction at the Clearing House maintained by State Bank of India, Agartala. ECS is an efficient, secure and fast payment system that enables quick movement of payments and receipts and is especially beneficial for bulk payments like salary, pension, Government benefit payments like NREGA and utility payments. Shri A. Krishna Kumar, Managing Director, State Bank of India was present at the launch.

At the special State Level Bankers Committee (SLBC) meeting held today, the following decisions were taken:

banks will strive to achieve 40 per cent credit deposit ratio during the current financial year;

to improve access to banking services in the North-East, banks will open at least 26 (of the over 400 branches to be opened) in brick and mortar form;

banks will organise a Financial Literacy Day before March 2012 to enhance financial literacy and awareness among the people of the state; and

the progress of these action points would be reviewed before October 2011.