A Financial Inclusion Mission will be launched from Independence Day this year as a time bound programme to provide all households in the country with banking services. This was announced by the Finance Minister Shri Arun Jaitley while presenting the General Budget 2014-15 in Lok Sabha here today. Shri Jaitley said that this step would particularly focus to empower the weaker sections of the society, including women, small and marginal farmers and labourers. He said two bank accounts in each household are proposed to be opened.

The Finance Minister said long term financing for infrastructure has been a major constraint in encouraging larger private sector participation. He said on the assets side, banks will be encouraged to extend long term loans to infrastructure sector with flexible structuring to absorb potential adverse contingencies, sometimes known as the 5/25 structure. Shri Jaitley said on liability side, banks will be permitted to raise long term funds for lending to infrastructure sector with minimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending.

The Union Finance Minister said that after making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year. He said RBI will create a framework for licensing small banks and other differentiated banks. Shri Jaitley said differentiated banks serving niche interests, local area banks and payment banks etc. are contemplated to meet credit and remittance needs of small businesses, unorganized sector, low income households, farmers and migrant workforce among others.

Expressing concerns over the rising Non Performing Assets (NPA) of Public Sector Banks (PSBs) the Union Finance Minister announced setting-up of six new Debt Recovery Tribunals at Chandigarh, Bangaluru, Ernakulum, Dehradun, Silliguri and Hyderabad.

Financial inclusion expands household banking access while enabling licensing of small and differentiated banks to meet local credit needs. Financial inclusion mission to provide universal household banking services targets weaker sections with two accounts per household; banks encouraged to offer long term, flexibly structured infrastructure loans and to raise long term funds with reduced regulatory pre emption; framework to authorize private universal banks and license small and differentiated banks, including payment and local area banks, to meet credit and remittance needs; additional Debt Recovery Tribunals to strengthen recovery of non performing assets.