Financial
Inclusion for Inclusive Growth of India – An Overview
Subroto Kumar Ghosh, Research Scholar
University Department of Commerce & Business
Management, Ranchi University, Ranchi.
Mobile: +91 97714 73885, Email: ghosh.com@gmail.com
Abstract
Inclusive
growth is possible only through proper mechanism which channelizes all the
resources from top to bottom. Financial inclusion is an innovative concept
which makes alternative techniques to promote the banking habits of the rural
people because, India is considered as largest rural people consist in the
world. Financial inclusion is aimed at providing banking and financial services
to all people in a fair, transparent and equitable manner at affordable cost.
Households with low income often lack access to bank account and have to spend
time and money for multiple visits to avail the banking services, be it opening
a savings bank account or availing a loan, these families find it more
difficult to save and to plan financially for the future.
India
is one of the largest and fastest growing economies of the world, but what has
been the most disturbing fact about its growth is that its growth has not only
been uneven but also discrete. It has been uneven in the sense that there has
been no uniformity in its growth performance and it has been discrete and
disconnected with regard to growth and distribution of growth benefits to
certain sectors of economy. And thus the need for inclusive growth comes in the
picture of Indian economic development. However for attaining the objectives of
inclusive growth there is a need for resources, and for resource generation and
mobilization financial inclusion is required. It plays a very crucial role in
the process of economic growth.
Financial
inclusion is considered as one of the important indicator of inclusive growth.
So in recent years the Indian government is giving top priority to financial
inclusion. The basic concept of financial inclusion in a country like India is
having a saving or current account with any bank. But in reality it includes
loans, insurance and much more. In India, the term ‘financial inclusion’ was
first introduced in 2005 and that too, from a pilot project in UT of
Pondicherry, by K.C.Chakrabarthy, Chairman of Indian Bank. Financial inclusion is
aimed at providing banking and financial services to all people in fair
transparent and equitable manner at affordable cost. It found that it is
necessary to improve the financial inclusion by extending and delivering of
financial services through new models and frame effective measures towards
financial inclusion of women. Hence this leads to improve the financial
inclusion among women’s and access timely credit for their empowerment as well
as strengthen socioeconomically.
Financial
inclusion is a critical issue for developing countries and represents a
significant challenge for India. In a country where more than 265 million
people (21% of its population) live on less than 1.9 dollars a day, poverty
reduction and economic equality are one of the most important social goals. In
this context, financial inclusion is a fundamental way of achieving this
target. Without access to basic financial services, poor people and small
businesses have to depend on their savings or other informal sources of
resources to invest in education, set up a firm or deal with any accidents or
losses. In macroeconomic terms, financial inclusion increases savings, promotes
investment and the consumption of durables, ultimately boosting economic
growth.
This
paper is an attempt to discuss the overview of financial inclusion in India.
Keywords:
Financial Inclusion, Reserve Bank, Inclusive Growth, Financial services.
Introduction:
Financial
inclusion is the recent concept which helps achieve the sustainable development
of the country, through available financial services to the unreached people
with the help of financial institutions. Financial inclusion can be defined as
easy access to formal financial services or systems and their usage by all
members of the economy. The committee on financial inclusion, of government of
India, has defined financial inclusion as the process of ensuring timely access
to financial services and adequate credit where needed by vulnerable groups
such as the weaker sections and low income groups at an affordable cost
(Rangarajan Committee, 2008). The process of financial inclusion consists of
ensuring bank accounts to each household and offering their inclusion in the
banking system (Reddy, 2007). Access to financial services promotes social
inclusion, and builds self-confidence and empowerment. In an address Dr. K. C.
Chakrabarty, Deputy Governor, Reserve Bank of India at the National Finance
Conclave 2010, has mentioned that financial inclusion is no longer a policy
choice but it is a policy compulsion today. And banking is a key driver for
inclusive growth.
There
are various socio-cultural, economic issues that hinder the process of
financial inclusion. For instance on demand side, it includes lack of awareness
and illiteracy (see Throat, 2007). From supply side, lack of avenues for
investment such as poor bank penetration, unwillingness of banks to do
financial inclusion or high cost involved in financial inclusion seem to be
some likely reasons for financial exclusion. However deputy governor of RBI has
recently clarified that the latter two reasons are myths, i.e. the cost in
involved in financial inclusion is not unbearable by the banks and that it is
not true that the banks are unwilling to do financial inclusion (see
Chakrabarty (2010)).
Financial
Inclusion in India
The
Reserve Bank of India setup a commission (Khan Commission) in 2004 to look into
Financial Inclusion and the recommendations of the commission were incorporated
into the Mid-term review of the policy (2005-06). In the report RBI exhorted
the banks with a view of achieving greater Financial Inclusion to make
available a basic "no-frills" banking account.
In
India, Financial Inclusion first featured in 2005, when it was introduced,
that, too, from a pilot project in UT of Pondicherry, by Dr. K. C.
Chakraborthy, the chairman of Indian Bank. Mangalam Village became the first
village in India where all households were provided banking facilities.
In
addition to this KYC (Know your Customer) norms were relaxed for people
intending to open accounts with annual deposits of less than Rs. 50, 000.
General Credit Cards (GCC) were issued to the poor and the disadvantaged with a
view to help them access easy credit. In January 2006, the Reserve Bank
permitted commercial banks to make use of the services of non-governmental
organizations (NGOs/SHGs), micro-finance institutions and other civil society
organizations as intermediaries for providing financial and banking services.
These
intermediaries could be used as business facilitators (BF) or business
correspondents (BC) by commercial banks. The bank asked the commercial banks in
different regions to start a 100% Financial Inclusion campaign on a pilot
basis. As a result of the campaign states or U.T.s like Pondicherry, Himachal
Pradesh and Kerala have announced 100% financial inclusion in all their
districts. Reserve Bank of India’s vision for 2020 is to open nearly 600
million new customers' accounts and service them through a variety of channels
by leveraging on IT. However, illiteracy and the low income savings and lack of
bank branches in rural areas continue to be a road block to financial inclusion
in many states. Apart from this there are certain in Current model which is
followed. There is inadequate legal and financial structure. India being a mostly
agrarian economy hardly has schemes which lend for agriculture. Along with
Microfinance we need to focus on Micro insurance too.
Definition
of Financial Inclusion
Although
the target groups may be different from county to country or region to region,
financial inclusion refers, in its broadest sense, to the delivery of financial
services at affordable costs to all sections, particularly weaker section.
A
Committee on financial inclusion (2008) headed by Dr.C. Rangarajan defined
financial inclusion as, “The process of ensuring access to financial services
and timely and adequate credit where needed by vulnerable groups such as weaker
sections and low income groups at an affordable cost”.
CRISIL
defines financial inclusion (2013) as, “The extent of access by all sections of
society to formal financial services, such as credit, deposit, insurance and
pension services”.
Financial
products & services are identified as basic banking services like deposits
accounts, institutional loans, access to payment, remittance facilities &
also life & non life insurance services. The following are the denotation
& connotation of financial inclusion in India.
· Affordable credit
· Savings bank account
· Payments &
Remittances
· Financial advice
· Credit / Debit cards
· Insurance facility
· Cheque facility
· Access to Financial
Markets
· Overdraft facility
· Empowering SHGs (Self
Help Groups)
· Pension for old age and
investment schemes
Background
of Financial Inclusion
The
efforts to include the financially excluded segments of the society in the
formal financial system in India are not
new.
The concept was first introduced by the RBI in 2005 and branchless banking
through banking agents called Bank Mitra (Business Correspondent) was started
in the year 2006. In the year 2011, the Government of India gave a
serious
push to the program by undertaking the “Swabhimaan” campaign to cover over
74,000 villages, with a population more than 2,000 (as per 2001 census), with
banking facilities.
Women
Empowerment
The
word ‘Women Empowerment’ has gained its importance in the ninth five-year plan
of the country and that year (2001) is declared as Women Empowerment year. In
general, women empowerment refers to an increase in economic, social, spiritual
and political strength of women which boosts their self-confidence and
self-esteem, decision making power, better access to resources, improved
ability to learn skills and a positive attitude above all.
According
to the UN definition, Women’s Empowerment has five components,
· Women’s sense of
self-worth;
· Right to have and to
determine choices;
· Right to have access to
opportunities and resources;
· Right to have the power
of control their own lives, both within and outside home;
· Ability to influence
the direction of social change to create more social and economic order,
nationally and internationally.
Empowerment
of women is very necessary for the development of society. A woman is empowered
when she is valued or treated as a normal human being of society who has a
freedom to participate in public activities. Women who are educated are
empowered because they know their rights. As our Constitution provides so many
fundamental rights to women, but women of rural areas are mostly illiterate so
they were not given any rights, they are supposed to do domestic work and look
after the children.
In
spite of the fact that in so many parts of India women are still confined only
to the four walls of houses performing household activities. This does not mean
that they are not able to do activities like academics, politics,
administration, social work and so on. Therefore, whenever women got an
opportunity to prove herself to the world she manifested that she is second to
none and also shown as a better saver and loan repayers than men.
Women
Empowerment is important because,
· Talented
· Economic benefits
· Reduce Poverty
· National Development
· Reduction in corruption
· Reduction in domestic
violence
· Irreplaceable in some
sectors
· Overall development of
society
· Underemployed and
unemployed
· Equally competent and
intelligent
Despite
a Government’s approach to improve access to financial inclusion in India,
research shows that in comparison to men, women are largely financially
excluded. The Global Financial Inclusion (Global Findex) data base suggests
that only 26 per cent of female adults in India have an account with a formal
financial institution as compared to 44
per cent of male adults (World Bank 2014).
Causes
of Financial Exclusion of Women
The
following are the major causes of financial exclusion of women.
· Literacy level
· Legal identity
· Gender Issues
· Lack of information
· Caste and Religion
· Cumbersome procedures
· Family discouragement
· Socio-economic factors
· Psychological factors
· Delay in obtaining
credit facilities
· Lack of financial and
family support
· Lack of self confidence
and risk bearing capacity.
Major
Initiatives towards Financial Inclusion in India
The
following data presents major initiatives towards financial inclusion in India.
Year Description
1969
Nationalization of Banks
1975
Establishment of RRB’s
1980
Nationalization of Banks
1982
Establishment of NABARD
1992
SHG Bank Linkage Programme (SBLP)
launched
2000
Establishment of SIDBI foundation for
Micro Credit
2006
Committee on Financial Inclusion headed
by Dr.C.Rangarajan
2007
Proposed Bill on Micro Finance
Regulation introduced in Parliament
2008 Rangarajan Commiittee Submitted its Final
Report on Financial Inclusion to Union Finance
Minister in January
2011
Swabhiman Compaign (RBI)
2013
Unique Identification Number (AADHAR)
and Direct Benefit Transfer (DBT) Scheme
2014 Pradhan Mantri Jan Dhan Yojana (PMJDY),
National Mission on Financial Inclusion launched
by Prime Minister on 28th August,
2014.
2015
Establishment of MUDRA Bank
2016
RBI approval to setup Small Finance
Banks and Payment Banks, Demonetization
2017
India Post Payments Bank (IPPB)
Launched
Out
of the major initiatives towards financial inclusion in India, the important
steps are SHG Bank Linkage Programme (SBLP) and Pradhan Mantri Jan Dhan Yojana
(PMJDY) plays a vital role for improving financial inclusion in India. The SHG
Bank Linkage Programme (SBLP) plays a vital role in empowerment of women and
improving financial inclusion.
Need
for Inclusive Growth in India
Inclusive
growth is necessary for sustainable development and equitable distribution of
wealth and prosperity. Achieving inclusive growth is the biggest challenge in a
country like India. In a democratic country like India, bringing 600 million
people living in rural India into the mainstream is the biggest concern. The
challenge is to take the levels of growth to all section of the society and to
all parts of the country. The best way to achieve inclusive growth is through
developing people’s skills. Since independence, significant improvement in
India’s economic and social development made the nation to grow strongly in the
21stcentury.
The
following factors encouraged the India to concentrate more on inclusive growth
·
India is the 7th largest country by area and 2nd by population. It is the 12th
largest economy at market exchange rate and 4th largest by PPP. Yet,
India is far away from the development of the neighborhood nation, i.e., China.
·
The exclusion in terms of low agriculture growth, low quality employment
growth, low human development, rural-urban divides, gender and socialite
qualities, and regional disparities etc. are the problems for the nation.
·
Reducing of poverty and other disparities and raising of economic growth are
the key objectives of the nation through inclusive growth.
·
Political leadership in the country plays a vital role in the overall
development of the country. But, the study has found that politicians in India
have a very low level of scientific literacy.
·
Studies estimated that the cost of corruption in India amounts to over 10% of
GDP. Corruption is one of the ills that prevent inclusive growth.
·
Although child labour has been banned by the law in India and there are
stringent provisions to deter this inhuman practice. Still, many children in
India are unaware of education as they lives are spoiled to labour work.
·
Literacy levels have to rise to provide the skilled workforce required for
higher growth.
·
Economic reforms in the country are overwhelmed by out dated philosophies and
allegations by the politicians and opposition parties in India.
·
Achievement of 9% of GDP growth for country as a whole is one of the boosting
factor which gives the importance to the Inclusive growth in India.
·
Inclusiveness benchmarked against achievement of monitor able targets related
to (i) Income & Poverty, (ii)
education, (iii) health, (iv) women & children, (v) infrastructure, (vi)
environment.
·
Even at international level also, there is a concern about inequalities and
exclusion and now they are also taking about inclusive approach for
development.
Elements
of Inclusive Growth
According
to Prime Minister, Sri. Manmohan Singh, the key components of the inclusive growth
strategy included a sharp increase in investment in rural areas, rural
infrastructure and agriculture spurt in credit for farmers, increase in rural
employment through a unique social safety net and a sharp increase in public
spending on education and health care.
The
five interrelated elements of inclusive growth are:
·
Poverty Reduction
·
Employment generation and Increase in quantity & quality of employment.
·
Agriculture Development
·
Industrial Development
·
Social Sector Development
·
Reduction in regional disparities
·
Protecting the environment.
·
Equal distribution of income.
Policy for inclusive
growth will include:
(1)
To subsidies only the lowest income people and not special groups of people;
(2)
Helping people invest in their own skills and future incomes;
(3)
Keeping government in the economy as light as possible;
(4)
Making tax rates low and broad based;
(5)
Keeping the ratio of public debt to GDP under control by limiting liabilities;
(6)
Applying rigorous social cost benefit tests to all spending and regulation
decisions;
(7)
Aligning responsibilities and resources among levels of government namely, the
states;
(8)
Tolerating a measure of inequality during a phase of rapid economic
development.
ADVANTAGE
OF FINANCIAL INCLUSION
·
ECONOMIC GROWTH
The
growth trend of the Indian economy over the last few years appears to indicate
the beginning of a new phase of higher growth. From an average growth rate of
around 6.0 per cent for a quarter of a century, the growth rate has accelerated
to 8.1 per cent over the last few years. Along with declining population
growth, this suggests high growth in per capita income in excess of 6 per cent
in recent years, and perhaps approaching 7 per cent, which would lead to
doubling of per capita income every ten years. Most importantly, the current growth
process is not a flash in the pan so through the financial inclusion, we will
achieve the inclusive growth and access of credit facility will lead to
increase the entrepreneurial skill of people and short out the problem of
credit crunch among the less developed people.
·
FINANCIAL DEEPENING
There
is a general consensus among economists that financial development spurs
Economic growth. Theoretically, financial development creates enabling
conditions for growth through either a supply-leading (financial development
spurs growth) or a demand following (growth generates demand for financial
products) channel. And that will lead to the growth of different financial
product in India.
Why FINANCIAL Inclusion in India is
Important ?
The policy makers have been focusing on
FINANCIAL inclusion of Indian rural and semi-rural areas primarily for three
most important pressing needs.
1. Creating a platform
for inculcating the habit to save MONEY – The lower income category has been living
under the constant shadow of financial duress mainly because of the absence of
savings.
2. Providing formal
credit avenues – So far the unbanked population has been vulnerably dependent
of informal channels of credit like family, friends and moneylenders.
Availability of adequate and transparent credit from formal banking channels
shall allow the entrepreneurial spirit of the masses to increase outputs and
prosperity in the countryside.
3. Plug
gaps and leaks in public subsidies and welfare programmes – A considerable sum
of money that is meant for the poorest of poor does not actually reach them.
While this money meanders through large system of government bureaucracy much
of it is widely believed to leak and is unable to reach the intended parties.
Government is therefore, pushing for direct cash transfers to beneficiaries
through their BANK ACCOUNTS rather than subsidizing products and making cash
payments.
What are the steps taken by RBI to support
FINANCIAL inclusion?
A. Initiation of
no-frills account – These accounts provide basic facilities of deposit and
withdrawal to accountholders makes banking affordable by cutting down on extra
frills that are no use for the lower section of the society. These accounts are
expected to provide a low-cost mode to access BANK ACCOUNTS. RBI also
eased KYC (Know Your customer) norms for opening of such accounts.
B. Banking service
reaches homes through business correspondents – The banking systems
have started to adopt the business correspondent mechanism to facilitate
banking services in those areas where banks are unable to open brick and mortar
branches for cost considerations. Business Correspondents provide affordability
and easy accessibility to this unbanked population. Armed with suitable
technology, the business correspondents help in taking the banks to the
doorsteps of rural households.
C. EBT – Electronic
Benefits Transfer – To plug the leakages that are present in transfer of payments
through the various levels of bureaucracy, government has begun the procedure
of transferring payment directly to accounts of the beneficiaries. This
“human-less” transfer of payment is expected to provide better benefits and
relief to the beneficiaries while reducing government’s cost of transfer and
monitoring. Once the benefits starts to accrue to the masses, those who remain
unbanked shall start looking to enter the formal FINANCIAL sector.
Committee on
financial inclusion
Khan Commission
RBI set up in 2004 to look into
FINANCIAL inclusion and the recommendations of the commission were incorporated
into the mid-term review of the policy (2005–06) and urged banks to
review their existing practices to align them with the objective of FINANCIAL
inclusion. RBI also exhorted the banks and stressed the
need to make available a basic banking ‘no frills’ account either with
‘NIL’ or very minimum balances as well as charges that would make such accounts
accessible to vast sections of the population of the many schemes and
programmes pushed forward by RBI the following need special mention.
Rangarajan Committee
4 major reasons for lack of financial
inclusion
·
Inability to provide collateral
security
·
Poor credit absorption capacity,
·
Inadequate reach of the institutions
·
Weak community network
·
there is need to organize Urban/peri-Urban poor people into
Neighbourhood Groups (NHGs) on the same pattern as has been adopted for the
rural poor.(Need to extend the mandate of NABARD to cover beyond rural areas)
·
alter the emphasis somewhat from the large Bank led, public
sector dominated, mandate ridden and branch-expansion-focused strategy
to Micro Banks.
2nd ARC (Administrative reforms commission) on
Financial Inclusion:
·
Innovation is critical for financial inclusion. This would mean
developing newer financial products in terms of loans, savings, insurance
services etc. which are tailored to the needs of the poor.
·
Currently, most public sector Banks and micro-finance
institutions have a narrow product offering, which limits the choice of the
SHGs and also constrains them in terms of utilizing the loans productively.
·
Extension of the RRB network to the remaining non-financed areas
would considerably speed up the process of inclusive banking and help in
extending micro-finance to local SHGs.
·
High penetration of telecom connectivity in India, together with
the latest mobile technology could be used to enhance financial inclusion in
the country.
·
MFIs should handle thrift / saving and money transfer only as
business correspondents of Scheduled Banks, but not in their individual
capacity as a micro-finance lender as it involves hard earned savings of the
poorest of the society
4 models of SHG-Bank Linkage:
·
SHG-Bank linkage promoted by a mentor institute (Eg: Self-Help
Promotion Agencies & NGOs) – SHPAs provide the seed money. 2nd ARC believed
that this is an appropriate model to be replicated on large scale
·
SHG-Bank direct linkage – Very less frequent because of meagre
initial savings of SHGs
·
SHG-Mentor Institution linkage(indirect linkage) – SHPAs act as
financial intermediaries. SHPI accepts the contractual responsibility for
repayment of the loan to the Bank unlike in case 1
·
SHG-Federation model – Cluster of SHGs forming a federation to
attain economic sustainability. This federation acts as an intermediary. Some federations
are even capable of accessing credit from large MFIs.
Nachiket Mor Commitee
Committee on Comprehensive Financial Services
for Small Businesses and Low Income Households” was set up by the RBI in Sep
2013 under the chairmanship of Nachiket Mor, an RBI board member.
Key Recommendations
1.
Providing a universal bank account to all Indians above the age
of 18 years by January 1, 2016. To achieve this, a vertically differentiated
banking system with payments banks for deposits and payments
2.
Wholesale banks for credit outreach. These banks need to
have Rs.50 crore by way of capital, which is a tenth of what is applicable for
new banks that are to be licensed.
3.
Aadhaar will be the prime driver towards rapid expansion in the
number of bank accounts. Monitoring at the district level such as deposits and
advances as a percentage of gross domestic product (GDP).
4.
Adjusted 50 per cent priority sector lending target with
adjustments for sectors and regions based on difficulty in lending.
5.
Increase the Priority Sector Lending Mandate The Mor committee has
recommended that the priority sector lending mandate for banks should be raised
from the current 40 per cent to 50 per cent. At the same time, the banks must
be freed from all pricing and other restrictions.
6.
Allow differentiated Licenses —The committee has
taken ahead the case of differentiated banking licences. It has proposed that
three new categories of banks viz. payment, wholesale investment and wholesale
consumer should be allowed. At the same time, the regulations for non-banking
financial companies, or NBFCs should be streamlined. The biggest problem here
would be the business viability of such banks. One example of differentiated
banking license is Regional Rural Banks, which were started off with great
promises but ultimately broke down.
7.
Meaningful Financial Inclusion —The Nachiket Mor
committee has suggested two specific district-level penetration metrics viz.
the credit- GDP and life cover-GDP ratios to monitor the meaningful financial
inclusion. This is a slight departure from the number of accounts formula of
financial inclusion. It is a meaningful recommendation and must be taken ahead.
DEEPAK MOHANTY
The Reserve Bank of India (RBI) on 15 July
2015 constituted a committee to work out a five-year (medium-term) action plan
for financial inclusion. The 14-member panel will be headed by RBI executive
director Deepak Mohanty.
1.
The Committee will work to spread the reach of financial
services to unbanked population.
2.
To review the existing policy of financial inclusion including
supportive payment system and customer protection framework taking into account
the recommendations made by various committees set up earlier.
3.
To study cross country experiences in financial inclusion to
identify key learnings, particularly in the area of technology-based delivery
models, that could inform our policies and practices.
4.
To articulate the underlying policy and institutional framework,
also covering consumer protection and financial literacy, as well as delivery
mechanism of financial inclusion encompassing both households and small
businesses, with particular emphasis on rural inclusion including group-based
credit delivery mechanisms.
5.
To suggest a monitorable medium-term action plan for financial
inclusion in terms of its various components like payments, deposit, credit,
social security transfers, pension and insurance.
Findings
From the
above analysis the following findings are made.
· As per Census 2011, position of
households availing banking services in India is 58.7 per cent it means 41.3 per
cent of households didn’t access to banking services.
· Out of the major initiatives
towards financial inclusion in India. The important steps are SHG Bank Linkage Programme
(SBLP) and Pradhan Mantri Jan Dhan Yojana (PMJDY) plays a vital role for
improving financial inclusion in India.
· It is necessary to overcome the
causes of financial exclusion and to conduct awareness campaigns on financial
literacy for improving financial inclusion as well as women empowerment.
· The SHG Bank Linkage Programme
(SBLP) plays a vital role in empowerment of women and improving financial
inclusion.
Suggestions
· Most of the rural and semi-urban
people are illiterates. So the banks and microfinance companies should conduct
awareness campaigns about the products and services offer by them to increase
the financial inclusion.
· The Banks also conduct awareness
campaigns about advanced technological developments in banking services it is
useful to the customer to adopt those services and also lead to improve the
financial literacy in the rural areas.
· This leads to improve the financial
literacy in the rural areas of women. So the women’s are included in to the formal
financial system and access the timely credit for their empowerment and
strengthen socio-economically.
· Whenever women’s are included in
the formal financial system and access to timely credit. Then the women’s use
credit facility for establishing micro enterprises and to become an
entrepreneur. This helps to increase the gross domestic product and national
development.
· It is necessary to overcome the
causes and as well as bottleneck problems in financial inclusion initiatives. So
it is the responsibility of government and policy makers to address the
problems and take necessary measures for their betterment.
· The Government of India, RBI and
Banks can frame effective measures to strengthen the microfinance sector and
achieve greater financial inclusion in India.
Conclusion
All this
shows that there is a need of financial inclusion for empowering women. As a
women’s needs are closely linked to their socially defined gender roles,
responsibilities and social structures. So, the government of India is concentrating
on the issue of women empowerment through financial inclusion to bring a
socio-economic change in the society. Hence it is necessary to improve the
financial inclusion by adopting new models for delivering and extending of
financial services to the rural areas particularly large hitherto un-served
population of the country to unlock its growth potential. So it is the duty of
the government to see that the banking services should be offered to all sections
in the society.
Today,
India has several strategic assets providing favorable conditions for
change-leveraging technology. A strong banking network of 115,000 branches
linked to ekuber (i.e., RBI's core banking solution) is spreading into rural
areas that lack banks. Indian Post, with 155,000 outlets, has a payment-banking
license, and point-of-sale networks and ATMs facilitate cash transactions
across the country. India’s vibrant network of almost 1 billion mobile
connections, covering 75% of the population, can facilitate the spread of
banking services through the business correspondent model and also enable funds
transfer over mobile phones. Moreover, Aadhaar, the national identification
system that seeks to cover the entire population by 2016, can provide backend
verification and the security architecture.
Financial
inclusion is the process of ensuring access to appropriate financial products
and services needed by vulnerable groups such as weaker sections and low-income
groups at an affordable cost in a fair and transparent manner by mainstream
institutional players. The banks have to take on the role of an advisor for
poor and disadvantaged as the right advice at a difficult time can go a long
way. It can be concluded that the contribution of Public sector banks in
financial inclusion is consistently growing more specific in rural & semi
urban area to utilize financial services of formal financial system. The number
of branches opened in rural area is more compared with other areas, while
expansion of branches of scheduled commercial bank in metropolitan cities is
comparatively less. Thus, it explains the role played by banking industry in
financial inclusion in India which commensurate with the growth of banking
sector in the country.
References
:
1. Pratisha
Padmasri Deka. Financial Literacy and Financial Inclusion for Women
Empowerment: A Study, ‘www.allresearchjournals.com, 2015; 1(9):145- 148.
2. Nirmala
Chandra Roy, Debasish Biswas. Women Empowerment through SHGs and Financial
Inclusion: A Case Study on Lataguri Region in West Bengal, www.ijmrr.com, 2016;
6(6):827-834.
3. Santosh et
al. Major Milestones of Financial Inclusion in India: An Analytical Study,
www.ijasrd.org/in, 2016; 3(3):24-34.
4. Pradhan
Mantri Jan-Dhan Yojana. A National Mission on Financial Inclusion, 5.
5. A
hundred small steps. Report of the Committee on Financial Sector Reforms, 2009,
49-50.
6. CRSIL
Inclusix, An index to measure India’s progress on Financial Inclusion, 2013,
17-19.
7.
www.nabard.org.
8.
www.rbi.org
9.
www.crisil.com
10.
www.pmjdy.gov.in
11. http://www.importantindia.com/19050/essay-onwomen-empowerment/
12.
http://www.censusindia.gov.in/2011census/Hloseries/HH12.html
No comments:
Post a Comment