Financial Inclusion: Indian Initiatives in the Global Perspective

Abstract

This comprehensive paper attempts to critically evaluate the initiatives taken by India through the Reserve Bank of India in achieving financial inclusion and the efforts made by the Banks and other organs in India for offering financial services and financial products as envisaged under the Financial Inclusion Scheme, on the basis of the objective data derived from the RBI'S reports and other empirical studies. This paper attempts to develop an overview of approaches to and trends in Indian Economy in the International perspective for achieving Inclusive growth through Financial Inclusion Scheme, to offer access to finance by the poor, disadvantaged and underprivileged group which is a prerequisite of poverty alleviation on one hand and the economic growth on the other. This paper argues that in the struggle against poverty, the financial inclusion is a crucial element. This paper pinpoints that the large sections of the rural population have no access to financial services and their only recourse is to borrow from moneylenders at the exorbitant charges causing exploitation; and the main reason why the large section of the rural population still remains under below poverty is financial exclusion, which is proving to be a major obstacle in the path of India's economic growth. The Reserve Bank of India (RBI)'s dictate (2005) obligated the Banks to adopt the national policy of financial inclusion and take initiatives and suitable measures therefor. The objective data derived from the RBI'S reports and other empirical studies unequivocally pinpoint that the main reasons of financial exclusion are lack of opportunities and access to finance, financial illiteracy, besides poor performance, apathy and negative approaches of the Banks. Therefore, financial inclusion, today, has become the national objective and major concern for the economic policy decision makers. This paper critically addresses all concerned issues involved in achieving the national objective of achieving the complete financial inclusion. This paper stresses the need of matured, positive attitude and approach and sound strategy to achieve complete financial inclusion. This paper also looks at some of the business models and essential elements of profitable models for financial inclusion so as to increase the meaningful and whole hearted participation of the banks in achieving complete financial inclusion.