2. Financial Inclusion is the process of ensuring
access to appropriate financial products and
services needed by all sections of the society in
general and vulnerable groups such as weaker
sections and low income groups in particular at
an affordable cost in a fair and transparent
manner by mainstream institutional players
3. ‘Financial inclusion’ or inclusive financing is the
delivery of financial services at affordable costs
to sections of disadvantaged and low-income
segments of society, in contrast to financial
exclusion where those services are not
available or affordable.
An estimated 2.5 billion working-age adults
globally have no access to the formal financial
services .
4. Background
The Reserve Bank of India (RBI) set up the Khan
Commission in 2004 to look into financial inclusion
In the report RBI exhorted the banks to achieve
greater financial inclusion with basic "no-frills" banking
account.
In India, financial inclusion first featured in 2005, when
it was introduced by K.C. Chakraborthy, the chairman
of Indian Bank.
Mangalam became the first village in India where all
households were provided banking facilities.
5. In January 2006, the Reserve Bank
permitted commercial banks to make use
of the services of non-governmental
organizations (NGOs/SHGs), micro-
finance institutions, and other civil
society organizations as intermediaries
for providing financial and banking
services.
Reserve Bank of India’s vision for 2020
is to open nearly 600 million new
customers' accounts and service them
through a variety of channels by
leveraging on IT.
6. Financial Inclusion – Who are these
People?
Underprivileged section in rural and urban areas
like, Farmers, small vendors, etc.
Agricultural and Industrial Labourers
People engaged in un-organised sectors
Unemployed
Women
Children
Old people
7.
8. Twin Aspects of Financial Inclusion
Financial Inclusion and Financial Literacy
are twin pillars. While Financial
Inclusion acts from supply side providing
the financial market/services what people
demand, Financial Literacy stimulates the
demand side – making people aware of
what they can demand.
9. Why financial Inclusion?
Economic Objective
Mobilisation of Savings
Larger Market for the financial system
Social Objectives
Sustainable Livelihood
Political Objectives
10. Reserve Bank of India (RBI) adopts
two approaches to achieve Financial
Inclusion
The minimalist approach–availability of
basic financial products and services.
The expanded approach–availability of
ancillary financial products such as
general insurance, health insurance,micro-
pension,housing finance and mutual fund.
Both the Approaches form a broader
context of economic inclusion
11. RBI and GoI Initiatives and
Policy Measures and Involvement
in Financial Inclusion No-Frill Accounts
Overdraft in Saving Bank Accounts
Simplification of Savings Bank Account Opening Form-
Financial Literacy Program
Simplification of Know Your Customer (KYC) Norms and Guidelines
Overcoming language barriers
Kisan Credit Cards (KCCs)
Opening of branches in unbanked rural locations
Rural Infrastructure Development
SHG Bank-Linkage Programme
Business Correspondents (BCs) and Business Facilitators (BFs) Model-
Creation of Funds for Financial Inclusion-Financial Inclusion Fund and
Financial Inclusion Technology Development Fund
12. Pradhan Mantri Jan Dhan
Yojana
launched by the PM of India, Narendra Modi on 28 August
2014
Run by Department of Financial Services, Ministry of Finance,
on the inauguration day, 1.5 Crore (15 million) bank accounts
were opened.
By 28 January 2015, 12.58 crore accounts were opened, with
around 10590 crore (US$1.7 billion) were deposited under the
scheme.
13. Benefits under PM JDY
Scheme
Interest on deposit.
Accidental insurance cover of Rs.1.00 lac (to be given
by HDFC Ergo)
No minimum balance required.
Life insurance cover of Rs.30,000/- (to be given by LIC)
Easy Transfer of money across India
After satisfactory operation of the account for 6 months,
an overdraft facility will be permitted
Accidental Insurance Cover, RuPay Debit Card must be
used at least once in 45 days.
Overdraft facility upto Rs.5000/- is available in only one
account per household, preferably lady of the
household.