RBI formed Financial Inclusion Fund

• The fund has been established, as a single entity (fund) by merging Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF), with Rs. 2000 crore corpus.
• It will support developmental and promotional activities for expanding reach of banking services. 
• Contribution to FIF would be from the interest differential in excess of 0.5 per cent on RIDF and STCRC deposits on account of shortfall in priority sector lending kept with NABARD by banks. 
• RIDF stands for Rural Infrastructure Development Fund and STCRC for Short-Term Cooperative Rural Credit. 
• The new FIF will be administered by the reconstituted Advisory Board constituted by government and will be maintained by NABARD. 
• The fund shall not be utilized for normal business or banking activities. 
• FIF will provide support for funding the setting up and operational cost for running Financial Inclusion and Literacy Centers. 
• Institutions eligible for the fund are banks and NABARD. 

In financial year 2007-08, the government had formed two funds namely the FIF and the Financial Inclusion Technology Fund (FITF) with a corpus of Rs500 crore, each. After completion of five years, the government has decided to merge the two funds to a single FIF.

By: Vishal