The banking industry has shown tremendous growth in volume and complexity during the last few decades. Despite making significant improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to include vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services. The problem of financial exclusion is not exclusive to the developing world. The developed countries too have been affected by it and many poor and disadvantaged people in the world still lack access to financial services. However, the type, degree and magnitude differ between the two worlds. In developing countries like India both market and government as institutions have their limitations, but it is necessary to design government policies that are attentive to those limitations. Financial Inclusion is one such intervention that seeks to overcome the friction that hinders the functioning of the market mechanism and operate it in favour of the poor and underprivileged. This paper is an attempt to examine the present scenario of financial inclusion in India.

Financial inclusion in India

Financial inclusion is a buzzword now and has attracted the global attention in the recent past. In India it is a new concept. Financial inclusion is a process that ensures the ease of access, availability and uses of the formal financial system for all members of an economy. As the banking services are in nature of public good, it is necessary that the entire population without discrimination of any kind should be facilitated with banking and payment services. This could be achieved either by state intervention through law enactment or through initiative of the banking community for admitting people from all layers of society within ambits of banking sector. Financial access can boost the financial condition and standards of life of the poor and disadvantaged. So RBI has been constantly encouraging the banking sector to develop the banking network both through setting up of new branch installation of new ATMs, implementation of EBT and also through BC model by leveraging upon the Information and Communication Technology (ICT). In this article an attempt has been made to focus on the RBI and GoI initiatives and policy measures, current status and future prospects of financial inclusion in India on the basis of facts and data provided by various secondary sources.

Financial Inclusion in India-An Overview

Banking sector play a vital role in the economic development of India. The  economic  progress of  the country achieved  through  maximum  number  of  participation  from  all  the  sections  of  the  society.  The  research papermain aim  isto  find  the  role  of  Indian  banking  sector  in financial  inclusion.The data  for  the  study  has been gathered through secondary sources including report of RBI, finance ministry, books onfinancial inclusion and  other  articles  written  by  eminent  authors.  The researcher concluded that financial inclusion is playing a catalytic role for the economic and social development of Indian society.

Role of Banking Sector in Financial Inclusion

/pdf/nabard-a-financial-inclusion-through-regional-rural-banks-34dyt1tkb7.pdf

NABARD: A Financial Inclusion through Regional Rural Banks (RRB’s) in India

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. Financial inclusion promotes thrift and develops culture of saving, improves access to credit both entrepreneurial and personal emergency and also enables efficient payment mechanism. 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. In order to expand the credit and financial services to the wider sections of the population, a wide network of financial institutions has been established over the years in India. Banks should give wide publicity to the facility of no frills account. Technology can be a very valuable tool in providing access to banking products in remote areas. ATMs cash dispensing machines can be modified suitably to make them user friendly for people who are illiterate, less educated or do not know English. The involvement of Self Help Groups and Micro Finance Institutions is also must for development of effective financial inclusion models by commercial banks. Recently, the RBI Governor Raghuram Rajan outlined, in conceptual terms, what inclusion should be. “Simplicity and reliability in financial inclusion in India, though not a cure all, can be a way of liberating the poor from dependence on indifferently delivered public services and from venal politicians,” Thus, the objective of Financial Inclusion is to extend financial services to the large hitherto un-served population of the country to unlock its growth potential. In addition, it strives towards a more inclusive growth by making financing available to the poor in particular. Banking sector plays considerable role in bringing financially excluded people in to formal financial sector. Financial inclusion has become one of the most critical aspects in the context of inclusive growth and development. 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. Traditionally, it has been understood to mean opening new bank branches in rural and unbanked areas. Nowadays, however, financial inclusion is seen to be something more than opening bank branches in unbanked areas to take formal financial services across the length and breadth of the country.  This article makes an attempt to assess the role of banking Industry in financial inclusion. Role of banks in financial inclusion process is studied on the basis data available from the Department of Financial services, Ministry of Finance, Govt. of India.

Role of Banking Industry in Financial Inclusion in India

The study is aimed at the study of the financial inclusion of the underprivileged students of the Christ College, those of the students belonging to SC/ST category. They have been excluded for the past many years and the government has been sending their stipend and grants to these students through electronic means to these students. The focus of the financial inclusion is to promote the sustainable development and creating awareness among the students about the banking industry and making them financially literate.

https://www.jetir.org/papers/JETIRL006012.pdf

Arun Balakrishnan

Papers

A Study On The Financial Inclusion Of Sc/St Students Among College Students