'Growth has to be inclusive to be real’: Rajan

While the RBI's primary role is preserving the purchasing power of the rupee, it has been mandated with two other important mandates - inclusive growth and development and preserving financial stability, new RBI governor Raghuram Rajan said.

The central bank of a developing country has the responsibility of developing additional tools to generate growth and financial inclusion, he said.

Towards this, Rajan hinted at a more liberal bank licensing policy, so that ''The Indian public would benefit from more competition between banks, and banks would benefit from more freedom in decision making.''

''The RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country. No longer will a well-run scheduled domestic commercial bank have to approach the RBI for permission to open a branch,'' Rajan said.

''We will, of course, require banks to fulfil certain inclusion criteria in underserved areas in proportion to their expansion in urban areas, and we will restrain improperly managed banks from expanding until they convince supervisors of their stability. But branching will be free for all scheduled domestic commercial banks except the poorly managed,'' he added.