One has now become accustomed to hearing every now and then that India is
prospering and its GDP growth is encouraging, i.e., moving upward. But the question
is whether all sections of the society have really benefited from this so-called growth
process. The true picture is what we still see after 66 years of independence that
the gap between the haves and have-nots has increased so vastly that the richer
have become richer and on the other hand, the poor are just getting poorer. The
real benefits of the economic reforms or fruit of development have percolated to
the lowest strata of society. India, after all these years of economic reforms, is
now at the crossroads. While one road leads India to economic prosperity and
glory, the other road leads it to economic inequality and social disparity. It is shocking
that about 30% of our countrymen lead a hand-to-mouth existence. Poverty is also accompanied by low health, malnutrition, high infant mortality and illiteracy.
So let us go for inclusive growth, a growth that will include and embrace all sections
of the society. Now, we need to translate growth into poverty-reducing growth, a
process of growth to which poor can contribute and from which poor can also
benefit immensely. Financial inclusion has a positive role for achieving inclusive
growth, which itself is required for ensuring the overall sustainable growth of a
country. Financial inclusion is viewed as the delivery of banking services at an
affordable cost to the vast sections of disadvantaged and low-income groups. It is
a fact that there are still a large number of people in rural and urban areas who
are financially excluded. They have the need for availing the various types of banking
services, especially the savings and money remittance services. This section of
financially excluded people provides a good opportunity for the Urban
Cooperative Banks (UCBs) to step in and fill this void. They have traditionally played
an important role in mobilizing resources from lower and middle-income groups
and in providing direct finance to small entrepreneurs and traders. UCBs, with
their deep-rooted connections with specific communities, can easily inspire the
trust of small savers and borrowers. At the same time, Non-Agricultural Cooperative
Credit Societies (NACCSs) can also play a significant role in ensuring savings habit
and mobilizing rural economy. By being local in nature and intricately interwoven
with the local community, these institutions have a clear advantage over commercial
banks. This is a challenge and a big opportunity for the UCBs as well as NACCSs at
the same time. Getting these unbanked people within the ambit of banking culture
should be the focus from now on. Now, in this respect, a question has come up as
to how the UCBs and NACCSs can accommodate a large number of urban people
who are still unbanked and financially excluded.
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