Important RBI Updates- Financial Inclusion Fund (FIF):
Dear Reader, Important recent RBI updates on Financial Inclusion Fund (FIF) were given here, which will be more useful for the candidates those who are preparing for upcoming bank exams.
RBI has formed Financial Inclusion Fund with 2000 crore rupees corpus:
TheReserve Bank of India (RBI) has formed a singleFinancial Inclusion Fund (FIF)with a corpus of 2000 crore rupees. The fund was formed by merging the Financial Inclusion Fund (FIF) andFinancial Inclusion Technology Fund (FITF). TheRBI also finalised the new scope of activities and guidelines for utilisation of the new FIF in consultation with the Union Government. The new FIF will be administered by the reconstituted Advisory Board constituted by Union Government and will be maintained byNABARD.
Financial Inclusion Fund (FIF):
· The Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) were constituted in the year 2007-08 for a period of five years with a corpus of 500 crore rupees each to be contributed byGovernment of India (GOI),RBI and NABARD in the ratio of 40:40:20.
· The guidelines for these two funds were framed by the Union Government itself. In April 2012, RBI decided to fund FIF by transferring the interest differential in excess of 0.5 percent on RIDF and STCRC deposits on account of shortfall in priority sector lending.
Objective of Financial Inclusion Fund
· To support developmental and promotional activities with a view to securing greater financial inclusion
· The development and promotional activities include creation of FI infrastructure across the country, capacity building of stakeholders, creation of awareness to address demand side issue, enhanced investment in GreenInformation and Communication Technology (ICT)solution and increased technological absorption capacity of financial service providers / users.
· The fund shall not be utilized for normal business / banking activities.
· To help create an eco-system that would support banks investment for future business expansion.
· To mobilise significant investment required for further facilitating investments from banks and other financial institutions in addition to ICT-BC (Information Communication Technology-Business Correspondent) model for expanding banking operations in the unbanked areas
Purposes of Financial Inclusion Fund
· Support for funding the setting up and operational cost for running Financial Inclusion& Literacy Centers in sync with the objective of Union Government for setting up Financial Literacy Center up to the block level under thePradhan Mantri Jan Dhan Yojana (PMJDY).
· Setting up of Standard Interactive Financial Literacy Kiosk in Gram Panchayats and any other financial literacy efforts under taken by banks in excluded areas
· Support to NABARD& Banks for running of Business& Skill Development Centers including R-SETIs (to the extent not provided by State Governments) to impart skill sets necessary for undertaking income generating activities and for providing forward linkages for marketing activities.
· Sharing the cost of Government projects in connection with laying of last mile fibre optic network, funding of other technological or infrastructure related projects involved in improving or creating network connectivity, etc; in excluded areas.
Eligible Institutions that can seek support from Financial Inclusion Fund
Financial Institutions viz, Commercial Banks, Regional Rural Banks, Cooperative Banks and NABARD.
Eligible institutions with whom banks can work for seeking support from the FIF-
· Non Government Organisations
· Self-Help Groups
· Farmer’s Clubs
· Functional Cooperatives
· IT enabled rural outlets of corporate entities.
· Well-functioning Panchayats
· Rural Multipurpose kiosks / Village Knowledge Centres
· Common Services Centres (CSCs)established byService Centre Agencies (SCAs)under theNational e-Governance Plan (NeGP).
· Primary Agricultural Societies (PACs).
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