“The case
for financial inclusion is not based on the principal of equity alone; access
to affordable banking services is required for inclusive growth with stability.
Achieving
financial inclusion in a country like India with a large and diverse population
with significant segments in rural and unorganized sectors requires a high
level of penetration by the formal financial system.”
-
Smt. Usha Thorat, Deputy Governor, Reserve Bank of
India
Financial Inclusion- providing access to financial services
for all has gained prominence in the past few years as a policy objective in
all countries of the world. Financial Access 2010, a report of the World Bank
released in September 2010 estimates that about half of the households in the
world have no access to a bank a/c. A cross country analysis using Financial
Access 2010, data indicates that a 1% change in GDP per capita is associated
with a change in around 0.3 to 0.6 % in the no. of deposit accounts per 1000
adults. CRISIL has launched an index
to measure the status of financial inclusion.
One of the
real time leading examples of financial inclusion that depicts agricultural empowerment
in the exact sense is The NSEL commenced connecting the farmers through an
efficient platform by facilitating direct selling of agro produce to consumers
with integrated delivery systems and assured security. It thereon had a progressive
ripple effect in the overall castor seed economy. Gujarat and Kerala have been
success stories to reminisce for years to come.
Due to price
transparency in the electronic markets, financial inclusion has flourished and
trade participants are aware about price levels at the spot exchange. Farmers having
an alternative market platform could negotiate a better price.
Therefore,
the bottleneck of location gets eliminated and on the flipside supplementary
benefits trickle in. Single terminal access to buyers makes buying decisions
nippy. Institutional interference in agriculture
marketing is a changed vista altogether.
Financial Inclusion, in a lay man’s language is highlighted
as:-
v The
delivery of financial services at affordable costs to sections of disadvantaged
and low-income segments of society.
v Financial
Inclusion has only gained importance since the early 2000s.
v A stark
example of financial inclusion in India is the Aadhar-linked bank accounts
planned by RBI. Such is a step to meet its commitment in financial inclusion.
v The long
struck disease of debt-traps over the poor people will be eliminated. Unlawful
money lenders and corruption have been a devastating curse.
Hence, there are transformational steps need to be taken to
achieve greater financial inclusion. Let us deliberate on specific key
elements:-
ü Relaxing KYC
norms
ü Advancement
of technology
ü Rural
evolvement and progress
ü Simple and
basic structure of operations
Important pressing needs makes focusing brain lens on
financial inclusion indispensable, such as:-
v Inculcating
savings habit
v Providing
formal credit avenues
v Plugging
gaps and leaks in public subsidies as well as welfare programs
Reserve Bank
of India is realizing the value of banking for the poor and such vision has
come into action by NSEL being the torch bearer. Such is the metal to move past
stagnation and advance towards sustainability.
Along with RBI’s
mandate to open branches in rural India with strength of above 1000, are the
policies incentivizing usage and perking up livelihood of the greater good.
This catalyst bourse has provided market intelligence and serves as a think
tank cum information bank, enabling farmers to take informed as well as down to
business decisions.
Bringing long term domestic savings to the stock market can
be accomplished with financial inclusion. Even common sense given, financial
inclusion is the key to stimulate growth and rural development, control inflation
and enhance efficiency.
The Indian Government is taking proactive steps such as rural
employment under the National Rural Employment Guarantee Act (NREGA), in which
payments are made through bank accounts, with job cards serving as a document
of identity. The UIDs planned to be provided to residents will further
facilitate financial penetration as these will serve to meet the KYC norms for
account holders with small value transactions.
Consequently,
It is Spot-on to say, “Mobile
services, not wallets will lead to financial inclusion.”
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