Recommending sweeping changes in the banking structure, an RBI panel has suggested setting up of specialised banks to cater to low income households to ensure that all citizens have bank accounts by 2016. It also suggested that facility for withdrawal, payment and deposit should be set up within a 15-minute walking-distance anywhere in the country.

The panel, headed by banker Nachiket Mor, was set up by Raghuram Rajan on the day of taking over as the RBI Governor, to suggest steps for promoting financial inclusion.

The panel advocated setting up of 'Payments Banks' to provide payment services and deposit products to small businesses and low-income households with a maximum balance of 50,000 rupees per customer.

Among the slew of changes on the regulatory front, it has made a case for gradual abolition of the statutory liquidity ratio (SLR), or the percentage of deposits invested in government bonds; raising the priority sector lending limit to 50 per cent, from the current 40 per cent, and allowing non-deposit taking Non Banking Financial Companies to work as business correspondents.

The panel said that there is a need for relook at the farm sector credit activities and suggested abolition of interest subventions and loan waivers.