Financial Inclusion

Financial inclusion and economic growth

Abstract

The era is of inclusive growth and for developing nations the crux for inclusive growth is financial inclusion. Finance has become an important part of an economy for development of the society as well as economy of nation. For, this purpose a strong financial system is required not only in under-developed countries and developing countries but also developed countries for sustainable growth. When financial services are delivered at affordable costs to the low income and disadvantaged groups of society it can be termed as financial inclusion or inclusive financing. There have been many dreadful disputes regarding the area of financial inclusion such as bringing the groups of society that are

Some products developed for fulfillment of this approach have been mentioned in this paper. i. No- Frills Account (NFAs):- This concept was introduced by RBI in November 2005 to provide access to basic baking services by financially excluded peoples. Under this approach banks open accounts with zero balance or very minimum balance requirement for the under-privileged. In 2012, the banks under RBI guidelines came-up with a better version of the no-frill accounts where they would open Basic Savings Bank Deposit Accounts (BSBDAs) for all individuals with the facility of debit card, cheque book, internet banking, overdraft limits at minimal charges. However, the number of transactions could be restricted so as to prevent misuse of such accounts. ii. Kisan Credit cards (KCCs):- Under this scheme banks issue smart cards to the farmers for providing timely and adequate credit support from single window banking system for their farming needs. During 2012-13 (up to December 2012), public and private sector banks issued 1.2 million smart cards as KCCs. iii. General Purpose Credit Cards (GCC) :- In 2005 Reserve bank of India, issue guidelines to banks that to provide General Purpose Credit Card (GCC) which facilitate credit up to Rs.25000/- without any collateral requirement for rural and semi urban people based on assessment of household cash flows. Now as per the revised guidelines in Dec.‟2013 under this approach bank also fulfill Non- farm entrepreneurial credit requirement of individuals (e.g. Artisan Credit card, Laghu Udyami Card, Swarojgar Credit Card, Weaver‟s Card etc) There will be no ceiling on the loan amount as long as the loan is for the purpose of non-farm entrepreneurial activity and is otherwise