Financial inclusion may be referred to as the process of providing financial services and easy access to credit to all the people in the country. Financial inclusion will enable banks to provide credit to vulnerable groups such as weaker sections and low-income group at a reasonable cost. It will also help banks to provide financial products to such sections and enable them to understand the importance of saving and investing money.
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Many economically weaker sections in India still do not have access to basic banking facilities. Thus they end up borrowing money from private moneylenders at high interest rate. Inclusion of the society as a whole would enable people to understand the concept of saving and investing money. Thus it may gradually help to eliminate many economic problems in the country and will boost the economic growth of India.
Financial inclusion means delivering services of the banks to all sections of the society. Financial inclusion plays a major role in driving away poverty and will help in surplus capital formation. Banks are now opening avenues to extend banking services to all at affordable terms. It enables to reduce the economic gap between the rich and the poor and enables fast-paced economic progress and development of the nation.
In India, the government had taken some active steps to prioritize financial inclusion. It has implemented several important schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY) through major public sector banks. The State Bank of India had laid active efforts in opening PMJDY accounts and has been a strong proponent of the RuPay debit card. The customers using these cards are liable to get accidental insurance cover for free. The number of people visiting bank branches and ATMs has significantly increased in both rural and urban areas.
Banks are also driving the initiative of financial inclusion by developing digital banking. People living in remote areas and woman are now better equipped with banking facilities through digital banking. Banks have slowly moved their operations online, thus allowing financial inclusion to widen its scope. The banks have also tied-up with third-party apps and BHIM app to enable the inclusion of small businesses and a large number of people engaged in various services. Banks are eager to further implement their programmes to serve low-income and other underserved customers and are keen to work more closely with policymakers on advancing these programmes as efficiently as possible. By bringing more and more citizens under the financial infrastructure, banks can encourage more transactions, more savings and stronger economic growth.
The apex financial institution of the country has adopted certain policies and measures for achieving financial inclusion. Thus these measures helped remove the roadblocks towards complete financial inclusion and for achieving the targeted goals. Thus the RBI has created a healthy regulatory environment and has given institutional support to banks to further this vision:
Here is a list of initiatives taken by the RBI:
See Also: What is a Savings Bank Account?
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