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Financial Inclusion in India

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Financial Inclusion in India

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INANCIAL INCLUSION - A path towards India’s future economic growth by Dr. K. Ravichandran, Dr. Khalid Alkhathlan Assistant Professor, King Saud University, Saudi Arabia SYNOPSIS: Though our country's economy is growing around 9 percent, still the growth is not inclusive with the economic condition of the people in rural areas worsening further. One of the typical reasons for poverty is being financially excluded. Though there are few people who are enjoying all kinds of services from savings to net banking, but still in our country around 40% of people lack access to even basic financial services like savings, credit and insurance facilities. So an inclusive sector should not only serve the bankable clients, but also integrate the "unbankable" clients by making them "bankable". Many actions taken by the government like Nationalizing of Banks, 40% of credit targets to priority sector, opening of RRBs and LABs, etc for past three decades are one form of financial inclusion, but still around 80 % of rural households do not have access to credit from a formal source. So as a last door step to Financial Inclusion, RBI came up with an initiative of launching National pilot project on Financial Inclusion in Puducherry in 2005. The specialty of this Financial Inclusion project is that accounts are opened by the bank officials at the doorsteps of households without insisting on any minimum balance or deposits. Let us analyze in depth that whether bringing people under banking category by this financial inclusion project helps in achieving the ultimate goal of lifting the standard of living of The Poor and reduce poverty in our country.

Introduction to Indian Economy

India is a country with diverse socio-economic condition along with diverse agro climatic situation. The growth trend of the Indian economy over the last few years appears to indicate the beginning of a new phase of higher growth. Though few decades ago, our country' economy was agricultural dependent...