There is still a vast majority of the Indian population that is unbanked. To reach this population, which has so far been excluded by the banking sector, the Reserve Bank of India has proposed some measures and is also stressing the importance of greater financial inclusion.

The Indian banking sector has witnessed tremendous growth in the past 15 years with the intensified competition among public, private and foreign banks. Banks are competing not only for the new customer but also for the competitors' customers. The range of banking products has increased and the improvement in technology is striving to give the improved customer experience. Despite all the competition, there is still a vast majority of Indian population which is totally cut off even from some of the basic banking services. There is more than 40% of the adult Indian population who do not have any account. If we look at the geographical distribution of account holders, there is a big difference among different regions. The northern region is better off with more than 84% of the adult population having an account; the southern region comes closer and stands second with 65% followed by the western region with about 61%. On the other, hand we have the central, eastern and the northeastern regions where the number of adults having bank account is less. The central region has 51% of the adults having an account followed by 41% in the eastern region and 37% by the northeastern region. These figures show that the Indian banking system has to go a long way to reach the masses. In the developed countries like England, more than 92% of the population has either a current or a savings account.

There can be many reasons for such a vast population in India not being banked, but the Reserve Bank of India (RBI) is seriously taking steps to address this problem of financial exclusion and is asking the banks to work towards greater financial inclusion.

Professional Banker Magazine, Indian Population, Banking Sector, Reserve Bank of India, Financial Inclusion, Indian Economy, Indian Banking System, Self-help Groups, SHGs, Financial Advicery Agencies, Community Reinvestment Act, Risk Management.