Financial Inclusion and Growth of Indian Banking System

Abstract

The issue of financial inclusion is emerging as the new paradigm of economic growth. Financial inclusion plays a major role in driving a way the poverty from the country. Financial inclusion refers to delivey banking services to masses including privileged and disadvantaged people at an affordable terms and conditions. It not only enhances overall financial intensity of agriculture but also help in increasing rural non farm activities which lead to development of rural economy and improve economic condition of people. The three major aspects of financial inclusion are (i) access financial market (ii) access credit market (iii) learn financial matters. Reserve bank of India and government play and important role in promoting financial inclusion for economic growth. Government and RBI has taken various steps to increase banking penetration in the country, nationalization of banks, establishment of RRBs, introduction of SHG and strategy of one person one account for accessing financial market. Accessing credit facilities improving interest rates, simple KYC process are major steps because nearly 80% of the population in India is without life, health, nonlife insurance cover.RBI has also adopted two strategies to generate great awareness and expand the reach of banking services which can be termed as empowerment and protection. The present paper purports is to access the Indian experience through descriptive and empirical studies of available statistical data and role of RBI in promoting financial inclusion. With special reference of some articles it is found that there are 403 million mobile users in India in which 54% has bank account. In which rural average among the adult population is 39% against 60% in Urban India. Himanchal Pradesh is only state to achieve full financial inclusion. The paper also explain the further opportunities, scope and challenges for financial inclusion.The paper concludes that financial inclusion plays a major role in driving away the poverty from the country. In India a day will come when all Indian have their bank accounts and everybody will take part in financial inclusion.