Of late, the term Financial Inclusion (FI) has become a
buzzword not only for the developing countries but also
for the developed. Internationally, efforts are made to
study the causes of financial exclusion and design strategies
to ensure FI of the poor and the needy. Interestingly, international
practices show that the more developed the society is, the
greater is the thrust on empowerment of the common man.
In spite of significant improvements after nationalization
of the banks in 1969, it is still felt that banks have not
been able to include vast segment of population, especially
the underprivileged sections of the society.
This is due
to various barriers like poor financial literacy, culture,
gender, income, remoteness of residence, proof of identity,
etc. To overcome these barriers, the Government of India,
along with various banks and several voluntary organizations,
has come forward to educate the poor and the underprivileged,
especially those in the rural areas, to have an easy access
to the banking facilities at affordable cost through the
creation of financial awareness and introduction of novel
technological advancements. These measures taken by the
government as well as the banks will not only bring about
financial inclusion, but also improve the overall economy
of the country.
FI is the delivery of banking services at an affordable
cost to the vast sections of disadvantaged and low income
groups. The prime objective is to make available the banking
services to the entire population without discrimination.
In simple words, FI is taking banking services to the common
man. For overall inclusion in the development process, the
Government of India has initiated several schemes like Rural
Employment Guarantee Scheme, the Bharath Nirman Program,
the Sarva Siksha Abhiyan, etc. A committee on FI, with Dr
C Rangarajan as Chairman, was constituted by the government
in June 2006 to recommend strategy for achieving higher
FI.
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