Financial Inclusion in India

Financial inclusion refers to the strategy adopted to make banking activities and its benefits reach the unbanked areas. It is a drive to bring the unprivileged people at par with the mainstream. Inclusive financial system allows poor households to save and manage their money in a secure manner, decreases their exposure to economic shocks in the form of drought, floods or any calamity of the kind which affects people dependant on agricultural activities. More than 150 million poor people have access to collateral free loans. However, there are still large sections of the world population that are excluded from the financial market. In India half of the poor are financially excluded from the country's main stream of banking sector. This paper discuss the current status of the financial inclusion in India, various measures taken by the RBI in this concern and examine critically the loopholes in these measures and suggest how to reap the benefit of financial inclusion.