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Research Paper on Financial Inclusion

-Atanu Mondal

ABSTRACT

Financial inclusion is the delivery of financial services, at affordable costs, to sections of

disadvantaged and low income segments of society. There have been many formidable

challenges in financial inclusion area such as bringing the gap between the sections of society

that are financially excluded within the ambit of the formal financial system, providing financial

literacy and strengthening credit delivery mechanisms so as to improvised the financial economic

growth. This report highlights the basic features of financial inclusion, and its need for social and

economic development of the society. The study focuses on the role of financial inclusion,

measures taken by the Government of India and RBI for promoting financial Inclusion. After

analyzing the facts and figures it can be concluded that undoubtedly financial inclusion is

playing a catalytic role for the economic and social development of society but still there is a

long road ahead to achieve the desired outcomes.

INTRODUCTION

Financial services actively contribute to the humane & economic development of the society.

These lead to social safety net & protect the people from economic shocks. Hence, each & every

individual should be provided with affordable institutional financial products/services popularly

called “Financial Inclusion”.

Despite witnessing substantial progress in financial sector reforms in India, it is disheartening to

note that nearly half of the rural households even today do not have any access to any source of

funds- institutional or otherwise. Hardly one-fourth of the rural households are assisted by banks.

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Hence the major task before banks is to bring most of those excluded, i.e. 75% of the rural

households, under banking fold. There is a need for the formal financial system to look at

increasing financial literacy and financial counseling to focus on financial inclusion and distress

amongst farmers. Indian banks and financial market players should actively look at promoting

such programs as a part of their corporate social responsibility. Banks should conduct full day

programs for their clientele including farmers for counseling small borrowers for making aware

on the implications of the loan, how interest is calculated, and so on, so that they are totally

aware of its features. There is a clearly a lot requires to be done in this area. This enables the

customer to remit funds at low cost. The government can utilize such bank accounts for social

security services like health and calamity insurance under various schemes for disadvantaged.

From the bank‘s point of view, having such social security cover makes the financing of such

persons less risky. Reduced risk means more flow of funds at better rates. Access to appropriate

financial services can significantly improve the day-today management of finances. For example,

bills for daily utilities (municipality, water, electricity, telephone) can be more easily paid by

using cheques or through internet banking, rather than standing in the queue in the offices of the

service.

A bank account also provides a passport to a range of other financial products and services such

as short term credit facilities, overdraft facilities and credit card. Further, a number of other

financial products, such as insurance and pension products, necessarily require the access to a

bank account.

1. RESEARCH DESIGN

1.1. Objective of the study:

The ability of banks to offer clients access to several markets for different classes of financial

instruments has become a valuable competitive edge. With the increase in the country's

population and the increased demand for banking services; speed, service quality and customer

satisfaction are going to be key differentiators for each bank's future success. Thus it is important

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Research Paper on Financial Inclusion -Atanu Mondal ABSTRACT Financial inclusion is the delivery of financial services, at affordable costs, to sections of disadvantaged and low income segments of society. There have been many formidable challenges in financial inclusion area such as bringing the gap between the sections of society that are financially excluded within the ambit of the formal financial system, providing financial literacy and strengthening credit delivery mechanisms so as to improvised the financial economic growth. This report highlights the basic features of financial inclusion, and its need for social and economic development of the society. The study focuses on the role of financial inclusion, measures taken by the Government of India and RBI for promoting financial Inclusion. After analyzing the facts and figures it can be concluded that undoubtedly financial inclusion is playing a catalytic role for the economic and social development of society but still there is a long road ahead to achieve the desired outcomes. INTRODUCTION Financial services actively contribute to the humane & economic development of the society. These lead to social safety net & protect the people from economic shocks. Hence, each & every individual should be provided with affordable institutional financial products/services popularly called “Financial Inclusion”. Despite witnessing substantial progress in financial sector reforms in India, it is dishearteni ...
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