-FINANCIAL INCULSION IN DECISION MAKING

Introduction

Meaning: Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. Unrestrained access to public goods and services is the sine qua non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy.

Indian Scenario

Around 50% of the Indian population suffers from chronic poverty and hunger. Only 31 % of the Indian population has accsess to Banking services. The rest 69 % are still deprived of bare minimum banking services for which they are totally dependent on informal banking sources like private money lenders. While the need to solve this mammoth problem is great, we are unable to reach large numbers of the poor with products, services and information they need to achieve financial security.

Aim

Our national vision for 2020 is to open nearly 600 million new customers' accounts and service them through a variety of channels by leveraging on IT. However, illiteracy and the low income savings and lack of bank branches in rural areas continue to be a road block to financial inclusion in many states. To achieve this objective commercial banks have started a drive to open branches in hitherto unbanked areas.

Steps

It can be said that Bank nationalization was first step towards Financial Inclusion in India.
RRBs were created to take banking services to rural people. Public Sector banks are making use of the services of non-governmental organizations (NGOs/SHGs), micro-finance institutions and other civil society organizations as intermediaries for providing financial and banking services. These intermediaries are being used as business facilitators (BF) or business correspondents (BC) by commercial banks.

In the current budget the govt has earmarked a sum of Rs 100 Crores for Banks to open branches in un banked and difficult areas. Biometric card based authentication devices, are being used by the banks Business Correspondents at the villages.

Financial Inclusion Includes Accessing Of Financial Products And Services Like

Savings facility Credit and debit cards access Electronic fund transfer All kinds of commercial loans Overdraft facility Cheque facility Payment and remittance services Low cost financial services Insurance (Medical insurance) Financial advice

FINANCIAL INCULSION IN DECISION MAKING

People

outside the mainstream financial services suffer financial disadvantages including: higher-interest credit; lack of insurance; no account into which income can be paid; and higher-cost utilities. Even those with bank accounts may barely use them, preferring to withdraw all their money each week and manage

 Exclusion

from affordable loans leaves people who need to borrow money with no option but to use high-interest credit. A lack of insurance and savings makes families vulnerable to financial crises following unexpected events such as burglary or flooding. A lack of savings can lead to poverty in old age.

 Many

employers will only pay wages into

a bank account. Cheque cashing agencies may charge 7 to 9 per cent of the value of the cheque plus a fee for the transaction. Not having a bank account with a direct debit facility excludes people from this method of paying bills. Most utility suppliers charge more for using other methods of payment, such as pre-payment meters, pay-point cards in convenience stores, postal orders or cash.

Conclusion :

Credit has done more to enrich nations than all the gold mines in the world put together. Commercial banks act as spokes in the wheels for drive to achieve 100 % financial inclusion in India. Financial inclusion through Commercial banks shall wipe out the last tear from the face of most deprived person on the Indian soil.

THANK YOU