This presentation is based on Financial Inclusion, 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.

1. Submitted By:
Priyank Thada
Dev Patel
FINANCIAL INCLUSION

2. INTRODUCTION
• 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.
• The objective of Financial Inclusion (FI) is to extend
financial services to the large hitherto unreserved
population of the country to unlock its growth potential. In
addition, it strives to achieve more inclusive growth by
making financing available to the poor in particular.

3. 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

4. BACKGROUND
• The Reserve Bank of India (RBI) set up the Khan Commission in 2004 to
look into financial inclusion
• In India, financial inclusion first featured in 2005, when it was
introduced by K.C. Chakraborty, the chairman of Indian Bank.
• Mangalam became the first village in India where all households were
provided banking facilities.
• 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.

5. FACTORS AFFECTING ACCESS TO
FINANCIAL SERVICES
• Psychological and cultural barriers: Many people willingly excluded
themselves due to psychological barriers and they think that they are
excluded from accessing financial services.
• Legal Identity: Lack of legal identity like voter Id, driving license, birth
certificates, employment identity card etc. is also a major factor affecting
access to financial services.
• Level of income -Low income people generally have the attitude of
thinking that banks are only for the rich people.
• Limited literacy- Lack of financial literacy and basic education prevent
people to have access to financial services. Financial literacy involves
encouraging people to use various financial products through various
economic agents like NGOs (Non-Profit Organizations), MFIs and
Business Correspondents etc.

6. STEPS TAKEN BY GOVERNMENT
AND RBI
In India, RBI has initiated several measures to achieve greater financial
inclusion.
• Opening of no-frills accounts: Basic banking no-frills account is
with nil or very low minimum balance
• Relaxation on know-your-customer (KYC) norms: KYC
requirements for opening bank accounts were relaxed for small
accounts in August 2005, details of name, address and Aadhaar
number.
• Engaging business correspondents (BCs):In January 2006, RBI
permitted banks to engage BF’s and BCs as intermediaries for
providing financial and banking services. It allows banks to provide
doorstep delivery of services, especially cash in-cash out transactions.

7. • Use of technology: to make effective use of information and
communications technology (ICT), to provide doorstep banking
services through the BC model.
• Opening of branches in unbanked rural Centre's: To further
step up the opening of branches in rural areas so as to improve
banking penetration and financial inclusion rapidly
• Ensuring reasonableness of bank charges: Accordingly, and in
order to ensure fair practices in banking services, the RBI has
issued instructions to banks making it obligatory for them to
display and continue to keep updated, in their offices/branches as
also in their website, the details of various services charges.
• General Credit Cards (GCCs)-Banks have been advised to
consider introduction of a General Purpose Credit Card (GCC)
facility up to Rs.25,000/- at their rural and semi-urban branches.
The credit facility is in the nature of revolving credit entitling the
holder to withdraw up to the limit sanctioned. Based on
assessment of household cash flows, the limits are sanctioned
without insistence on security or purpose.

8. • Kisan Credit Cards (KCCs)- Kisan Credit Cards to small
time farmers have been issued by banks. As on March 2012,
the total number of KCCs issued has been reported as 30
million with a total amount outstanding to the tune of Rs.2,
068 billion. The figure, respectively, were 27 million and
Rs.1, 600 billion on March, 2011.

9. PRADHAN MANTRI JAN DHAN
YOJNA
• 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.

10. BENEFIT OF PMJDY
• 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 up to Rs.5000/- is available in only one account per
household, preferably lady of the household.

11. FUTURE PROSPECTS
• With a vision to attain inclusive growth, the Government, RBI and the
implementing agencies are required to place mind and hearts together to
develop methods and measures to take forward financial inclusion.
• The need is to develop and apply scalable, platform-independent
technology solutions which, if implemented on a large scale, will bring
down the high cost of operation. Proper and efficient technology, thus,
holds the key for financial inclusion to take place on an accelerated
scale.
• There is also an opportunity for banks to improve delivery mechanism
and existing structure of operations. The mass banking with no-frills
accounts can become a win-win situation for both the banks and the
customers.
• The financial institutions, especially the banks, can speed up the
financial inclusion process by increasing enrolment of SHGs through
bank linkage programme. Rural penetration and banking is solution to
financial inclusion.

12. THANK YOU