Promotion of financial inclusion will increase the outreach of the banking system to the hitherto unreached.

The Indian banking sector has evolved significantly over the years. Its changing landscape can be greatly attributed to factors like expansion drive, introduction of innovative products to suit customer's demands, effective usage of technology, etc. Increasing competition among the public, private and foreign players also indirectly facilitated the rapid growth of the sector. Despite all the efforts, there is still a large chunk of Indian population which doesn't have access to the basic banking services. Therefore, RBI has taken initiative in its Annual Policy Statement of the year 2005-06 to promote financial inclusion. It has also encouraged Indian banks to implement financial inclusion to outreach the financially excluded.

Providing access to financial products and services is the first step in the process of financial inclusion. The next step is the provision of various financial products and services which are available in a fair and equitable manner. Credit counseling is the third step which includes providing sound advice to arrest deterioration of incomes, restructuring of debt solution to overcome debt burden and improve money management skills. Such advice shall also include not to avail of the credit facility on merits of the case.

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