Financial Inclusion

Background
Only 34% of Indian individuals have access to or receive banking services. In order to increase this number the Reserve Bank of India had the Government of India take innovative steps One of the reasons for opening new branches of Regional Rural Banks was to make sure that the banking service is accessible to the poor

Introduction
Financial inclusion is the availability of banking services at an affordable cost to disadvantaged and low-income groups In India the basic concept of financial inclusion is having a saving or current account with any bank. In reality it includes loans, insurance services and much more.

Purpose:to connect the excluded with the formal banking system in order to help them obtain an understandingof the financial services available and equipping them with the confidenceto make informed financial decisions. Basic servicesinclude deposits / withdrawals, credit, remittance, investment, insurance etc. No frills account:An account with zeroor minimum balancewith maximum balance of Rs 50,000/-at any given point in time and total credit in a year not exceeding Rs 1,00,000/-. Banks can restrict the nature of services offered, number of transactions permitted etc.

Benefits
For the common manescape from the clutches of money lenders; sending / receiving remittances; no need to hold savings in cash etc. For the banksachieving access to a large untapped pool of customers. For the Govt.-ensuring flow of aid / grants to the targeted beneficiary. For the RBI -spread of banking culture and extension of the reach of formal financial system.

Challenges
even today as only about 38% of bank branches are in rural areas and only 40% (approx.) of the countrys population have bank accounts

Swabhimaan
It was launched in February, 2011 by the Government, which is focused on bringing the deprived sections of the society in banking network to ensure that the benefits of economic growth reach everyone at all levels This financial inclusion campaign named, Swabhimaan aims at providing branchless banking services through the use of technology

Banks will provide basic services like deposits, withdrawals and remittances using the services of Business Correspondents also known as Bank Saathi
This initiative also enables Government subsidies and social security benefits to now be directly credited to the accounts of the beneficiaries so that they could draw the money from the Business Correspondents in their village itself

Contd.
Banking facilities like Savings Bank, recurring Deposits, Fixed deposits, Remittances, Overdraft facility, Kisan Credit Card (KCCs), General Credit Cards (GCC) and collection of cheques will be provided.
The BCs will help in making available banking facilities to the interior areas through various handheld mobile devices and other technologies that reduce cost and have the ability to record banking transactions and to communicate the record of such transactions to the Bank using the internet facilities / GPRS

Aadhaar