FINANCIAL INCLUSION ON BANKING SECTOR SERVICES.

The benefits of economic growth have not equitably reached different parts of our society. The
rural and agricultural sector, in particular, has not gained the desired momentum of growth and
development.
Access to finance by the poor and vulnerable groups is a prerequisite for poverty reduction and
social cohesion. This has to become an integral part of our efforts to promote inclusive growth.
In fact, providing access to finance is a form of empowerment of the vulnerable groups. The
various financial services include credit, saving, insurance payments and remittance facilities.
The objective of financial inclusion is to extend the scope of activities of the organized financial
system to include within its ambit people with low incomes. Through graduated credit, the
attempt must to be lifting the poor from one level to another so that they come out of poverty.
As the economy began to grow at higher rates, the regional and societal disparities called for new
strategies to ensure that the banking system met the requirements of inclusive growth. Such
strategies needed to be fashioned in a manner that they did not undermine the stability and
efficiency of the financial system. Specific focus on financial inclusion commenced in
November 2005, when Reserve bank advised banks to make available a basic banking ‘no-frills’
account with low or nil balance as well as charges, with a view to expanding the outreach of such accounts. In such accounts, banks are required to make available all printed material used by
retail customers in the regional language concerned.
Financial inclusion rest on three pillars viz., access to financial services, affordability of such
services and actual utilization of such services. Financial inclusion can be achieved only if all the
three pillars show affirmative results.