"FINANCIAL INCLUSION"
Introduction:
Financial Inclusion or
inclusion financing is the delivery of financial products, at affordable costs
to sections of disadvantaged and low income segment of society. It is in the
contrast to financial exclusion, where those services are not available or
affordable.
As per United Nations,
the goal of financial inclusion is to ensure access to a full range of
financial services, to ensure continuity, at a reasonable cost and certainty of
investment.
India: RBI set up the Rangarajan Committee in 2004 to look into financial
inclusion. Financial inclusion first featured in 2005 and Mangalam become the
first village in India where all households were provided banking facilities.
RBI Initiatives:
- Opening of no-frills accounts (replaced by basic saving bank accounts);
- Simplified branch authorization for tier III to tier VI centers (population of less than 50,000) under general permission;
- Relaxation in KYC norms for small deposits accounts;
- Issue of general credit cards;
- Allowing engaging business correspondents;
- Implementation of Electronic Benefit Transfer (EBT) by leveraging ICT –based banking;
- Effective usage of Information and Communications Technology (ICT), to provide doorstep banking services;
Financial Inclusion Index:
On 25th June, 2013, CRISIL
launched an index (Inclusix) to measure the statue of financial inclusion in
India. Inclusix is a one of its kind tool to measurement the extent if
inclusion in India, in each of the 632 districts. It is a relative index on a scale
of 0 to 100, and combines 3 critical parameters of basic banking services
(branch penetration, deposit penetration, credit penetration), into one metric.
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