Empowering Financial Inclusion through Financial Literacy

Abstract

The term 'financial inclusion' means availability of banking services at an affordable cost to disadvantaged and low-income groups. The banking and financial services include savings, deposits, borrowing, payment and remittance facilities. Financial inclusion mainly focuses on the poor who do not have formal financial institutional support and getting them out of the clutches of local money lenders. As a first step towards financial inclusion policy, Regional Rural Banks were set up. With the directive of Reserve Bank of India (RBI), Banks allow low income groups to open 'no frills accounts'. These accounts either have a low minimum or nil balance with some restriction in transactions. RBI has further relaxed KYC norms and restrictions on mobile banking. NABARD has also contributed significantly by introducing SHG-Bank linkage programme, Kisan Credit Card (KCC) Scheme and has sanctioned Trainers' training programme on financial literacy, farmers' service, village knowledge, mobile credit counseling centres and promotion of farmer education. It also includes providing facilities of micro insurance and micro pension.