Posted in Finance Articles, Total Reads: 2045
, Published on 02 June 2014
Financial inclusion which is one major policy of RBI has many challenges in achieving it. Financial inclusion in general is providing wide range of financial services at reasonable cost. Financial inclusion Chairman Dr.C.Rangarajan says “ Financial inclusion is the process of ensuring access to financial services timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at affordable cost”.
Image Courtesy: freedigitalphotos.net, 1shots
The first three year plan of Financial inclusion in India was started in 2010-2013.The essence of financial inclusion is to ensure delivery of financial services which include bank accounts for savings and transactional purposes, low cost credit for productive personal and other purposes. The three year FIP progress includes
Increase of scheduled commercial banks from 68,681 to 1,02,343
In rural areas the number of banks have increased from 30,572 to 37,953
Total bank outlets in villages (including RRBs) has gone up from 67694 to 2,68,454 from March 2010 –March 2013
33.79 million non-farmers was given Kissan Credit cards for small entrepreneurs.
Basic saving and Bank Deposit accounts has been opened and has increased from 73.45 million in March 2010 to 182.06 million in March 2013.
Expansion of ATM in rural places has increased to 30.6%
The major initiatives taken by RBI for Financial inclusion includes:
• Advised all banks to open BSBD accounts
• Relaxed and simplified KYC(Know Your Customer ) norms
• Simplified Branch Authorisation policy
• Compulsory requirement of opening branches in unbanked villages
• Opening of intermediate brick and mortar structure
• Financial Literacy
• Licensing of new banks
Some initiatives taken by private corporate include E-Choupal/E-Sagar(ITC),Haryali Kissan Bazaar (DCM),Project Shakthi (HUL).
Financial Literacy which is one major initiate of RBI is the process of creating awareness among the lower income group about the financial services available. It is usually conducted through campaigns. It consists of three sessions called first, second and third.
The first session focuses mainly on the financial concepts, personal finance and management of money amongst the people. Before conducting campaigns, advance publicity is necessary for ensuring the strong attendance of the villagers.
The second session is conducted fortnights wherein business correspondents have been appointed to assure their assistance for the village people.
The third session is done after two months of first session wherein the initial account holders are interacted and business correspondents are enquired for the progress.
The most emerging issues of financial inclusion are explained in a 7C’s Framework. The basic 7C’s are cost, convenience, confidence, commitment, convergence, consumer protection and communication. If the 7C framework is achieved, the national objective of financial inclusion is reached. Let’s hope for the new change in Financial Inclusion
This article has been authored by S.ABIRAMI and P.M.BHAALAJI from Thiagarajar School of Management, Thirupparankundram
If you are interested in writing articles for us, Submit Here