ABSTRACT
The conversations with Rangarajan presented in this chapter covers a range of issues divided between his tenure as Governor and the report he submitted later. The main thrust of Rangarajan’s argument is that the issue of inclusion has to be addressed in two axes: spatial and sectoral. The solutions for each of these are different. To address the spatial issue, Rangarajan advocates institutional architecture like SHGs, Local Area Banks and Regional Rural Banks. The role played by self help groups operating on the principle of mutuality comes out as the most significant interventional aspect in his argument. While Rangarajan is generally in agreement with how the other institutional structures like MFIs, Small Finance Banks and new generation banks have evolved, he is not fully in agreement with the market argument being applied to organisations set up to address the spatial exclusion. There he argues that the RBI has a developmental and a regulatory role to play and one has to look at the issue as building an ecosystem in the economy for banking rather than just enabling banking to happen.
