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Financial inclusion does not make business sense for commercial banks, said Naina Lal Kidwai, Chairperson of HSBC India and Executive Director on the board of HSBC Asia Pacific.

“I am a big supporter of financial inclusion, but right now it does not make business sense for banks. Some of the banks who have been pushed into it are stressed banks. To make it work, it is critical to have direct benefits transfer pushed through the banking system,” Kidwai said while speaking at the Shared Value Summit 2015. BusinessLine is a media partner for the event.

If a right push is not provided for making financial inclusion a good business proposition for banks, then there is a risk that some of the accounts that have been opened as part of the Jan Dhan Yojana will have to be closed, Kidwai said speaking at a session on financial inclusion, moderated by Raghuvir Srinivasan, Associate Editor, BusinessLine.

Asked if banks are willing to lend to big business tycoons even though they might have defaulted but often not to small traders, Kidwai said: “Banks lend after understanding the risks, if they don’t understand the risks they don’t lend. However, we have instances where a bank will lend to micro-finance institutions at attractive rates because they understand the risks better.”

Chetna Sinha, Founder and Chairperson, Mann Deshi Mahila Bank, who spoke at the session, suggested that the banking sector needs to listen to customer needs. She referred to the doorstep banking initiative of her bank as “women often don’t come to the bank branch fearing loss of a working day”.

Sinha further added that Jan Dhan accounts now needed an overdraft facility since more often than not, people know very well how to manage finances.

Rajat Kathuria, Director and CEO of ICRIER, said achieving financial inclusion by opening brick and mortar branches will not be possible.

“The Jan Dhan-Aadhar-Mobile or JAM trinity, as was referred in the Economic Survey, has to be successful. Credit-linked products need to be supplemented with other products. The availability of technology and evolution of new financial products should be successful for financial inclusion. I do not think there is any other way,” he added.

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