27-09-2013, 03:20 PM
ROLE OF BANKS IN ENHANCING FINANCIAL INCLUSION IN INDIA
Who are excluded ?
Marginal farmers – landless labour – oral lessees – self employed – unorganized sector –
urban slum dwellers – migrants – ethnic minorities – socially excluded groups – senior
citizens – women – NER, Eastern & Central regions most excluded
Reasons for Exclusion :
Remote, hilly & sparsely populated areas with poor infrastruc-ture and difficult physical
access,Lack of awareness, low income, social exclusion, illiteracy
Distance from bank branch, branch timings, cumbersome documentation/procedures,
unsuitable products, language, staff attitude are common reasons – Higher transaction
cost Ease of availability of informal credit,KYC – documentary proof of identity/ address.
Recent RBI Initiatives :
1969-1991 : expansion of branch network – average population covered per branch
reduced from 64000 to 13711 – liberalisation/opening of economy – financial sector
reforms – deregulation – increased competition – strengthening of banks through
recapitalization – prudential measures – Indian banking now robust & able to achieve
global financial inclusion India is second largest populated country in the world and 72.17
population living in villagesOut of 6.0 lack habitations in the country, only about 30000
have a commercial banks.
Initiatives for financial inclusion in India
Starting in the late 60‘s through 80‘s the focus was on channeling of credit to the
neglected sector of the society with special emphasis on weaker section Nationalization of
major commercial banks in 1969 and 6 banks in 1980 Starting in the late 60‘s through
80‘s the focus was on channeling of credit to the neglected sector of the society with
special emphasis on weaker section Nationalization of major commercial banks in 1969
and 6 banks in 1980 General credit card and overdraft were introduced in 2006 RBI
permitted banks to utilize the services of NGOs SHGs MFs as Business facilitators and
Business correspondents.