Ever since 1991 banking reforms , the Indian banking
sector has made a creditable progress in terms of deposits , credit facility, expansion
of branch and variety of financial instruments. Apart from remarkable growth,
the mission of ensuring access to financial services by weaker section and low
income groups was left unattended. The key problems are the lack of awareness,
availability, accessibility and usage of banking services. These have profound impact on the economic health of the people as
well as of the country.
Financial inclusion is to offer financial services
at cheaper cost to those individuals which are unable to afford it and develop
financial instruments so that it is easily accessible by less educated
individuals. Large sections of individuals are able to include themselves
financially due to this process.
Financial inclusion is centre goal of every nation
in the world as a nation cannot run and grow without formal savings. In a
nation, if most of the people save money but they save informally or store
their saving in their own domicile then that type of savings is not useful for
that nation. That’s why financial inclusion has a significant role in the
growth and development of the nation. Unlike informal saving, formal saving is in
which people save their money in the bank account so that their money is in
position to aid the nation through various aspects like capital formation.
The significance of financial inclusion is that it
leads to equitable growth and decline in inequality in regard of income and
savings, mobilisation of savings , sustainable livelihood and for political
objective like efficient path is provided for government schemes. It also makes
easier to transfer money into the bank account of deprived people under social
security schemes. Liquidity risk and asset liquidity mismatches are regulated
by banks by changing their dependency
from bulk deposits to a large number of lower deposits.
Number of initiatives has been carried out both by
reserve bank of India and the government to include the financially excluded
people in the formal banking sector. Reforms carried out by reserve bank of
India are innovations in banking schemes, no frill accounts, relaxation in KYC
guidelines, opening of banks in rural localities, kisan credit cards. Some of
the government initiated schemes are Jan Dhan Yojana Scheme, Sukanya Samriddhi
Yojana, Pradhan Mantra Jeevan Jyoti Bima Yojana, Rashtriya Swasthya Bima Yojana
, Pradhan Mantra Mudra Yojana.
The main idea of the is
to assess the banking habits of people it also attempts to examine the level of
awareness, availability, accessibility and usage of banking services. It also
studies how banking services has made them economically empower.