RBI 2007’s FIF & FITF reborn to Rs 2,000 crore FIF

To support developmental and promotional activities RBI has merged the two funds to form a single Financial Inclusion Fund. Contribution to FIF would be from the “interest differential” in excess of 0.5% on RIDF*and STCRC* deposits.

OUTLAY – 2000 crore

• In 2007-2008 two funds named as Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) was introduced for a period of 5 years with a corpus of Rs. 500 crore each to be contributed by Government of India (GOI), RBI and NABARD in the ratio of 40:40:20.

Now after a thorough discussion, RBI and GOI has finalised the guidelines for this new Fund (formed by merging FIF & FITF). This new FIF will be administered by Advisory Board of GOI and will be maintained by NABARD. Also it will not be utilized by the regular banking and business activities.

OBJECTIVES OF BRAND NEW FIF

• Creating of FI infrastructure across the country
• Capacity building of stakeholders
• Creation of awareness to address demand side issues
• Enhanced investment in Green Information and Communication Technology (ICT) solution
• Support for funding the setting up and operational cost for running Financial Inclusion & Literacy Centers
• Setting up of Standard Interactive Financial Literacy Kiosks 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) which will help in imparting skill sets necessary for undertaking income generating activities and for providing forward linkages for marketing activities.
• Support to pilot projects for development of innovative products, processes and prototypes for financial inclusion. Proposals for such products and prototypes will have to be submitted through any of the implementing banks.
• 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.

*RIDF – Rural Infrastructure Development Fund
STCRC – Short-Term Cooperative Rural Credit