Financial Inclusion and Regional Rural Banks: A Case Study of Regional Rural Banks in Jharkhand

Indian Economy in general and banking services in particular have made rapid strides in the recent past. However a sizeable section of the population, particularly the vulnerable groups, such as weaker sections and low income groups, continue to remain excluded from even the most basic opportunities and services provided by the financial sector. To address the issues of such financial exclusion in a holistic manner, it is essential to ensure that a range of financial services is available to every individual. In advanced economies, financial inclusion is more about the knowledge of fair and transparent financial products and a focus on financial literacy. In emerging economies, it is a question of both access to financial products and knowledge about their fairness and transparency. Financial inclusion is the availability of banking services at an affordable cost to disadvantage 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. The first ever index of financial inclusion is to find out the extent of reach of banking services among 100 countries. India has been ranked 50. Only 34 % of Indian individual have access to or receive banking services. Therefore, it is essential for our country to make the concept of financial inclusion wider through reaching rural and urban masses and by in calculating banking habits among them. To achieve this objective a Committee under the leadership of C, Rangarajan was formed. The Committee defined financial inclusion as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable group such as weaker sections and low income groups at a affordable costs With merger infusing the much needed financial strength in RRBs coupled with the local feel and familiarity they command, RRBs are in a unique position to play a decisive role in FINANCIAL INCLUSION. In rural area, RRBs account for a substantial 37 % to the total offices of all commercial banks. In semi-urban areas, their share comes to 15 %. Is goes without saying that exclusion is more severe in rural areas. In Jharkhand the situation is grim. Though RRBs in Jharkhand were set up to render financial education among the rural population it failed to do so. Rural POPULATION IN Jharkhand were set up to render financial education among the rural population it failed to do so. Rural population in Jharkhand is still deprived off basic banking facilities either due to inadequate branch expansion, or due to illiteracy and ignorance. Further it was noticed that complicated banking procedures adopted by RRBs in Jharkhand made the rural population away from RRBs. Thus it is essential for RRBs to include financial inclusion as one of the major objectives. The present study highlights the role of regional Rural Banks in promoting financial inclusion in Jharkhand. The Present study also highlights the benefits involved in integrating people especially rural population with the Regional Rural Banks. This paper is based on primary and secondary sources of information.