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e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 17, Issue 9.Ver. I (Sep. 2015), PP 35-39
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Abstract: Even after 68 years of independence, a large portion of the Indian population still remains excluded
from the banking net. In recent years the Government and Reserve Bank of India has been pushing the concept
and idea of financial inclusion. The Financial Inclusion Plan aims at providing easy access to the financial
services to those sections of the society who are deprived of it so far at affordable cost thereby bringing them
into the mainstream financial sector. RBI set up the Khan Commission in 2004 to look into financial inclusion
and the recommendations of the commission were incorporated into the mid-term review of the policy (2005
06) and urged banks to review their existing practices to align them with the objective of financial inclusion.
Honourable Prime Minister of India, Sri Narendra Modi announced this scheme from the ramparts of the Red
Fort for comprehensive financial inclusion on his first Independence Day speech on 15 August 2014. The
scheme was formally launched on 28 August 2014 with a target to provide 'universal access to banking
facilities' starting with Basic Bank Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit
card with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card & in next phase, micro
insurance & pension etc. will also be added. An attempt is made in this paper to study and cover the following:
Performance of the Pradhan Mantri Jan Dhan Yojna (PMJDY)
Latest trends being implemented for Financial Inclusion by PMJDY.
Keywords: Financial inclusion, Banking services, Universal access, Business, Technology
I.
Introduction
Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to
sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those
services are not available or affordable. An estimated 2 billion working-age adults globally have no access to the
types of formal financial services delivered by regulated financial institutions. It is argued that as banking
services are in the nature of public good; the availability of banking and payment services to the entire
population without discrimination is the prime objective of financial inclusion public policy. The term "financial
inclusion" has gained importance since the early 2000s, a result of findings about financial exclusion and its
direct correlation to poverty. The United Nations defines the goals of financial inclusion as follows:
access at a reasonable cost for all households to a full range of financial services, including savings or
deposit services, payment and transfer services, credit and insurance;
sound and safe institutions governed by clear regulation and industry performance standards;
financial and institutional sustainability, to ensure continuity and certainty of investment; and
Competition to ensure choice and affordability for clients.
In the Indian context, the term financial inclusion was used for the first time in April 2005 in the
Annual Policy Statement presented by Y.Venugopal Reddy, Governor, Reserve Bank of India. Later on, this
concept gained ground and came to be widely used in India and abroad. While recognizing the concerns in
regard to the banking practices that tend to exclude rather than attract vast sections of population, banks were
urged to review their existing practices to align them with the objective of financial inclusion. The Report of the
Internal Group to Examine Issues relating to Rural Credit and Microfinance (Khan Committee) in July 2005
drew strength from this announcement by Governor Y. Venugopal Reddy in the Annual Policy Statement for
2005-06 wherein he had expressed deep concern on the exclusion of vast sections of the population from the
formal financial system.[9] In the Khan Committee Report, the RBI exhorted the banks with a view to achieving
greater financial inclusion to make available a basic "no-frills" banking account. The recommendations of the
Khan Committee were incorporated into the mid-term review of the policy (200506). Financial inclusion again
featured later in 2005 when it was used by K.C. Chakraborthy, the chairman of Indian Bank. Mangalam became
the first village in India where all households were provided banking facilities. Norms were relaxed for people
intending to open accounts with annual deposits of less than Rs. 50,000. General credit cards (GCCs) were
issued to the poor and the disadvantaged with a view to help them access easy credit. In January 2006, the
Reserve Bank permitted commercial banks to make 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 could be used as business facilitators or business
DOI: 10.9790/487X-17913539
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II.
1.
2.
3.
4.
Literature Review
According to Indian institute of banking and finance, financial inclusion is delivery of banking services at
an affordable cost ('no frills' accounts,) to the vast sections of disadvantaged and low income group.
Unrestrained access to public goods and services is the sine qua non of an open and efficient society. 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 the public policy.
According to Dr. K.C.Chakrabarty, Deputy Governor, Reserve Bank of India, financial Inclusions the
process of ensuring access to appropriate financial products and services needed by all sections of the
society in general and vulnerable groups such as weaker sections and low income groups in particular at an
affordable cost in a fair and transparent manner by main stream institutional players.
Research Paper on, Overview of Financial Inclusion in India, by C. Paramasivan and V. Ganeshkumar,
Financial inclusion aimed at providing banking and financial services to all people in a fair, transparent and
equitable manner at affordable cost. This paper is an attempt to discuss the overview of financial inclusion
in India.
Mr. Nanjibhai D. Ranparia in his Research Paper on, Financial Inclusion in Gujarat: A Study on Bankers
Initiatives includes study of different financial inclusion aspects and evaluates progress and current status
of financial inclusion of the state.
Dr. Anupama Sharma and Ms. Sumita Kukreja in, An Analytical Study: Relevance of Financial Inclusion
for Developing Nations, states the role of financial inclusion, in strengthening the Indias position in
relation to other countries economy. The study gathered data through secondary sources including report of
RBI, NABARD, books on financial inclusion and other articles written by eminent authors.
DOI: 10.9790/487X-17913539
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No. of Accounts
Public sector banks
Regional rural
banks
Private sector banks
13.64
3.11
0.7
17.45
No. Of Rupay
Debit Cards
12.54
2.27
Balance in Accounts
17273.12
3684.56
% of Zero balance
Accounts
45.75
48.55
0.62
1075.01
22032.68
45.71
46.25
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C. Paramasivan and V. Ganesh kumar (2013) Overview of Financial Inclusion in India Overview of Financial Inclusion in India,
International Journals of Management and Development Studies, Vol. 2, March, PP45-49
Dr. Anupam Sharma and Ms. Sushmita Kukereja (2013) An Analytical study: Relevance of Financial Inclusion for Developing
nations, International Journal of Engineering and Science, PP15-20
Mr. Nanjibhai D. Ranparia (2013) Financial Inclusion in Gujarat: A Study on Bankers Initiatives, International Journal Of
Scientific Research, Vol.2, February, PP32-34
Wikipedia.com
Firstpost.com
Website of Pradhan Mantri Jan Dhan Yojana
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