Promoting Financial Inclusion - United Nations Development ...

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concerned with augmenting the supply side without adequate recognition of the long term potential of demand side measures such as effective financial literacy programmes. Initial pilots have amply demonstrated the significant difference that an aware client can make in the manner in which financial products and services are delivered to and used by her. 40 PROMOTING FINANCIAL INCLUSION
6 The Way Forward The Government of India is committed to ensuring financial inclusion for the entire population and this intention has been reflected in the policy initiatives taken over the last few years.Various policies have been stimulated by the recommendations of the committees set up for suggesting strategies to promote financial inclusion and improve the health of rural financial structures. Over the past 4-5 years, as financially inclusive policies have been put in place, financial institutions have also started experimenting with different models for reaching the excluded and offering them various services. With the overall framework in place, it is now time to focus on large scale implementation of the suggested policies. As discussed in the previous section, and based on the collective experience so far, it is apparent that a few issues continue to decelerate the progress towards financial inclusion. 6.1 DO BANKS SEE THE BUSINESS POTENTIAL OF FINANCIAL INCLUSION? As part of the renewed emphasis on financial inclusion, the six lakh villages (including 72,825 unbanked villages with population >2,000) have been allocated to various banks for coverage by 2012-15. The banks have also been advised by the RBI to submit their financial inclusion plans, integrated with their normal business plans, and approved by their Board. While this measure undoubtedly encourages the banks to give the activity some impetus, the question remains whether banks see true business potential in the delivery of financially inclusive services or whether they view it as a regulatory requirement that they need to adhere to in order to continue to do business in the more profitable segments. Over the decades since the first wave of bank nationalization in 1969, the regulations have required the financial institutions to go down-market and to financially excluded areas. While much has been achieved under the regulatory framework, what has been done by the banks seems to have been the minimum necessary to allow them to gain approval. Thus, while significant areas of the rural hinterland of the major states are now reasonably served with banking services; parts of central India, the hill regions and the northeast as well as many of the poorest areas of eastern India continue to be sparsely banked. Even where banking services are available in these regions they cater to the PROMOTING FINANCIAL INCLUSION 41
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Disclaimer: FICCI The information a
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Please contact FICCI at: E-mail: fi
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4.13 Conclusions - inclusion constr
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to this study is greatly acknowledg
Page 10 and 11: FITF FLCC FMCG FSM GCC GoI HDI ICAI
Page 12 and 13: x EXECUTIVE SUMMARY
Page 14 and 15: metropolitan centres so this does n
Page 16 and 17: • Historical problems such as the
Page 18 and 19: FIGURE Yields in the Banking System
Page 21 and 22: 1 Background Inclusive economic gro
Page 23 and 24: financial services as it has implic
Page 25 and 26: • Providing financial services ac
Page 27 and 28: The analysis of region-wise credit
Page 29 and 30: …WHILE PROGRESS UNDER OTHER GOVER
Page 31 and 32: The contribution of SBLP to financi
Page 33 and 34: provide remittance services due to
Page 35 and 36: terms of number of borrowers, the S
Page 37 and 38: 4 The Policy Conundrum - Is It Prud
Page 39 and 40: BCs. These BCs have been able to op
Page 41 and 42: 4.3 MICRO-INSURANCE REGULATIONS 14
Page 43 and 44: crore as grant support for promotio
Page 45 and 46: IMPROVING THE QUALITY OF MANAGEMENT
Page 47 and 48: norms. However, the banks still nee
Page 49 and 50: at the prime lending rates of banks
Page 51 and 52: exchange, loan products and card pr
Page 53 and 54: prefer to transact with banks only
Page 55 and 56: use of smart cards, mobile technolo
Page 57 and 58: • Limited number of FLCCs: One of
Page 59: savings, and this has ultimately af
Page 63 and 64: price for those provided services o
Page 65 and 66: Case Studies of Financial Inclusion
Page 67 and 68: each located at least 1-2 km apart
Page 69 and 70: Officer (CEO) with support from the
Page 71 and 72: course fee to successful candidates
Page 73 and 74: • Commission structure: The BC ag
Page 75 and 76: on a single card. In the field, the
Page 77 and 78: Box C.7 Field Visit Observations fr
Page 79 and 80: operations management and portfolio
Page 81 and 82: convince new account openers to obt
Page 83 and 84: Annexes ANNEX 1: PRINCIPLES OF CLIE
Page 85 and 86: • Customers are informed of their
Page 87 and 88: Distance criterion Payment of commi
Page 89 and 90: Financial Inclusion Fund Promotion
Page 91 and 92: Package Key features Reforms in the
Page 93 and 94: Activities Amendments of rules and
Page 95 and 96: Activities Computerisation Status G
Page 97: RBI, 2009, “Financial deepening b
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