Role of Banks in Financial Inclusion

Rapid economic growth in India in the recent years has brought in its wake a number of concerns, which relate to expanding this growth across regions, sectors and people. The major objective is to ensure inclusive growth by removing the constraints of poor infrastructure, improving economic efficiency and spreading the benefits of growth over a vast population, which has remained outside the purview of this development process. The financial sector in the country has also experienced revolutionary changes out a segment of population is excluded from the advantages of this revolutionary process. Financial exclusion, which is generally the outcome of poverty, ignorance and environmental factors, is to a great extent related to supply side issues i.e. lack of appropriate financial services for poor. Hence, for the inclusive growth Financial Inclusion is the need of the hour. The Government of India and the Reserve Bank of India have been making concerted efforts to promote financial inclusion as one of the important national objectives of the country. Some of the major efforts made in the last five decades include – nationalization of banks, building up of robust branch network of scheduled commercial banks, co-operatives and regional rural banks, introduction of mandated priority sector lending targets, lead bank scheme, formation of self-help groups, permitting BCs/BFs to be appointed by banks to provide door step delivery of banking services, zero balance BSBD accounts etc. The fundamental objective of all these initiatives is to reach the large sections of the hitherto financially excluded Indian population.