SIDBI is conducting Interviews for the post of SIDBI Grade A Officer. So in this scenario here is an article on Financial Inclusion. We hope this will help you in your preparation.
Financial inclusion is a concept of making available banking/financial services to a vast section of low income groups and weaker sections at an affordable price. The objective of financial inclusion is to provide the service of basic banking products to the unserved masses of the country, aiming towards inclusive economic growth.
The need for financial inclusion raised when even after years of Independence 40% population lacked access to basic banking products. And apart from poverty, illiteracy and lack of regular income the major barriers are lack of reach, high cost of transactions and time.
The expansion of the horizon of Financial Inclusion can be done through various initiative needs to be taken by banking system, financial regulators and government.
Regulatory steps taken by Reserve Bank of India in this regard-
a.BSBDA (Basic Savings Bank Deposit Account)
- No requirement for any minimum balance.
- No limit on the number of deposits while restriction on withdrawal to 4.
b. Relaxation in KYC guidelines
c. Use of extensive technology in banking
d. Appointing business correspondents and business facilitators
e. Opening of branches in unbanked rural areas
f. Licensing of differentiated banks like Payment Bank and Small Bank
Schemes launched by Government of India to promote financial inclusion are-
a. PMJDY (Pradhan Mantri Jan Dhan Yojana) - The main features of this scheme are
a. The slogan of the scheme is “Mera Khata – Bhagya Vidhaata”
b. The scheme provided Rs 5,000 overdraft facility for Aadhar – linked accounts and RuPay Debit Card for all account holders
c. An accident insurance cover of up to Rs. 1 Lakh is also provided.
b.Pradhan Mantri Suraksha Bima Yojana - The main features of this scheme are
a. For personal accident insurance
b. Age group: 18-70 years
c. Sum assured: Rs 2 lakh, while premium: Rs 12 per annum
c. Pradhan Mantri Jeevan Jyoti Bima Yojana - The main features of this scheme are
a. For life insurance
b. Age group: 18-50 years
c. Sum assured: Rs 2 lakh, while premium: Rs 330 per annum
d. Atal Pension Yojana - The main features of this scheme are
a. For pension purpose
b. Age group: 18-40 years
c. Fixed pension: Rs 1000-5000 per month at age of 60 years.
Banking products that play a crucial role in the expansion of Financial Inclusion:
a. Savings-cum-overdraft account
b. Remittance products
c. Savings product
d. Kisan credit card (KCC) or General credit card (GCC)
Fund Allocation: Reserve Bank of India recently created a new Financial Inclusion Fund (FIF) with funding of Rs 2000 Crore for expanding the reach of banking services. The new Financial Inclusion Fund is created by merging Financial Inclusion Fund and Financial Inclusion Technology Fund into a single Fund — Financial Inclusion Fund (FIF).
The new FIF will be maintained by NABARD.
In addition to this, Reserve Bank of India constituted a 14 - member committee under the chairmanship of RBI executive director Deepak Mohanty. It will work out a five-year action plan to spread the reach of financial services to unbanked population.
Benefits of Financial Inclusion-
a. It offers potential for increasing banking business by bringing more and more customers to bank
b. It seeks to improve the standard of living of vast majority of poor persons.
c. It enhances the number of Bankable customers.
d. It boosts the growth of Banking Business.
e. It can bridge the Urban-Rural divide.
Present situation Analysis-
a. As per census 2011, 58.7% households are availing banking services in India against 35.5% in 2001.
b. As on 31 March 2015, a total of 1,25,857 branches of Scheduled Commercial Banks are functional which includes 85,895 branches of Public Sector Banks.
c. As on 28 October 2015, a total of 19.02 crore accounts have been opened under the PMJDY.
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