RBI Governor Raghuram Rajan (centre).
Reserve Bank of India Governor Raghuram Rajan has lauded the Supreme Court’s ruling Thursday that allows for Aadhar to be used in banking services.
Talking to reporters after a board meeting in Mizoram capital Aizawl, Rajan said, “I think that this Supreme Court ruling today on Aadhar will be quite helpful in making it possible for us to use Aadhar in banking services.
“It will make it easier to pursue financial inclusion because once somebody has a unique ID perhaps they can open a bank account, the banks know where they have accounts and they can get easier access to lending because they use their unique ID as an identification, they don’t get multiple loans from different places, we can ensure that doesn’t happen.”
Rajan was responding to a query on how the RBI might step in to make banks lend more easily to common people.
“Its very easy to lend money, its much harder to lend money that comes back and that doesn’t create a debt burden for the borrower. So what we need is responsible lending and responsible borrowing,” he said.
“Much of our effort on financial inclusion is to make it possible for sound ideas from small entrepreneurs and SHGs to get financing but then the burden of repaying the debt doesn’t become excessive and they don’t get into a debt trap. So in all this a variety of actions are needed…. I think [the SC ruling] is an example of how to make more lending possible,” the RBI Governor said.
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