On similar lines, PBs were set-up with the objective to further financial inclusion by providing small savings accounts and payments/remittance services to migrant labour workforce, low-income households, small businesses, other unorganised sector entities and other users6. Since their inception, SFBs have started playing a progressive role in mobilising savings from and providing credit to their niche customer segments, furthering the cause of financial inclusion.
What saved the day for the Indian financial system was our policy approach of gradual and calibrated integration of the domestic financial system with overseas markets, especially the debt markets – through capital controls – as also well-modulated regulatory policies to contain bank exposure to sensitive sectors, which are more prone to asset bubbles, such as real estate and capital markets.