Banks’ business models for financial inclusion should be designed to be at least selfsupporting in the initial phase and profit-making in the long run, with an unwavering focus on affordability. The banks need to think and act differently and make themselves more flexible so as to meet even the smallest requirements of the rural population.
The last twelve months were eventful: we have cut our key policy rates all the way down to the lower bound – including by taking the deposit facility rate into negative territory; we have launched an important programme of targeted lending operations, the TLTROs; and we have announced two distinct purchase programmes, one of which targets asset-backed securities whilst the other targets covered bonds.