Role of Government in financial inclusion
Abstract:- This research paper contains the full information about the financial inclusion of the world’s economic. In this research paper we describe the financial inclusion basic meaning, definitions, scope & significance. Now we move towards the second phase which include role of government & role of banks in financial inclusion. we also include the reforms that has been done by the government and the other government organizations .
We also include the main article that has been given by the different ministers about financial inclusion & its reform.
Meaning: Financial inclusion is a policy adopted by many countries to include more people in the financial set up of the country. It aims at tackling poverty and deprivation in the country. In simple terms financial inclusion refers to making the finance or the financial/banking sector more accessible to people. For example: Debit cards, internet banking and direct debit facilities are now common, convenient and cheap ways of paying for goods and services. Yet there are still people who are excluded from using these services. People who are losing out as they are unable to take advantage of the benefits offered by the range of financial products available.
In developing and poor countries like Bangladesh, Nepal, Afgan etc there are many people who do not even have a bank account or who are unable to take advantage of the loans and
deposit benefits offered by banks due to various reasons like lack of knowledge, fear, lack of proximity etc. Today, personal debt is at a record high and borrowing without a bank account means using high interest lenders. Many of the people in this position live in our poorest communities and find themselves without choice or access to basic financial services, making it even more difficult to find routes out of poverty.
Defination: Financial Inclusion is the delivery of banking services at affordable costs to vast sections of disadvantaged and low income groups. 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. The term Financial Inclusion has gained importance since the early 2000s, and is a result of findings about Financial Exclusion and its direct correlation to poverty. Financial Inclusion is now a common objective for many central banks among the developing nations.
Financial Inclusion in India
The Reserve Bank of India setup a commission (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). In the report RBI exhorted the banks with a view of achieving greater Financial Inclusion to make available a basic "no-frills" banking account. In India, Financial Inclusion first featured in 2005, when it was introduced, that, too, from a pilot project in UT of Pondicherry, by K C Chakraborthy, the chairman of Indian Bank. Mangalam Village became the first village in India where all households were provided banking facilities. In addition to this KYC (Know your Customer) norms were relaxed for people intending to open accounts with annual deposits of less than Rs. 50, 000. General Credit Cards (GCC) 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...