History of Financial Inclusion
Financial Inclusion came into light in 2005 when Mr.Y.V
Reddy, Governor of The Reserve Bank of India, coined the term ‘Financial
Inclusion’ that gained a lot of momentum. In 2008, under the leadership of Mr C
.Rangarajan, RBI governor, a committee was formed, where financial inclusion
was acknowledged and recognized.
Meaning of Financial Inclusion
Financial Inclusion means making available the financial services to the last strata of the people, living in the remote villages, at a low cost. The purpose is to provide financial services to the poor people, for their benefit and inclusive growth. Most of the people in India are residing in remote villages without any access to financial and banking services.
Why there is a need for Financial Inclusion?
The poor and illiterate, believe that they have no other
option but to borrow money from ‘Unlicensed people’. These unlicensed people
comprise of moneylenders, sahukars etc, who lend money at exorbitant interest
rates, taking undue advantage and making their lives of the borrower miserable.
Role of a Bank in Financial Inclusion In India
In order to prevent exploitation of the underprivileged,
Government of India implemented the concept of financial inclusion. For its
execution, banks were asked to provide a platform to financially weaker
sections of the society so that all financial services are available to them at
lower or reasonable cost. This includes all financial services whether it be
banking services, loan/credit facilities, deposit facilities etc.
Conclusion
Growth of Urban Sector does not conclude the existence
of inclusive growth. The economic growth of a country can be achieved only when
the benefits and opportunities of financial services are accessible to every
section of society.
Financial inclusion includes
provision of banking services such as opening of bank accounts for savings and
transactional purposes, insurance facilities, financial advisory services and
equity products to the underprivileged at reasonable cost. This will ensure
that the poor sections of the country also get and enjoy the same benefits as
urban segment ensuring country’s growth.
