Financial Inclusion and Literacy In India - A Critical Study

This article addresses the main elements of financial inclusion- advice, banking and credit. According to certain researches, financial exclusion can lead to social exclusion. This article propagates the international experience&difficulties in promoting inclusive banking. Financial inclusion in india has a long way to go. It should be viewed as a huge business opportunity by all indian banks. There should be a good synergy between the people and the banks to make this work. Banks have large number of outlets in the rural area and it may be further increased. With enabling technology support, the delivery channel could be widened with reduced transaction cost. Further with the introduction of core banking solution, in most of the banks, there is huge surplus of manpower. This surplus manpower needs to be reoriented to take up the challenge of advising the rural masses and bring them into the fold of banking and credit. The banks need to assess their capacities and local knowledge to promote financial inclusion and literacy. This article highlights the need of franchisee arrangements by banks with micro-credit institutions, SHG's,&NGO's in india for providing banking solution for the urban poor and rural masses, which in turn would deliver growth. Technology can be a valuable tool in providing access to banking products in remote areas. ATM's cash dispensing machines can be modified suitably to make them user friendly for people, who are illiterate, less educated or do not know English. This article identifies the usage of the following modern technologies like smart cards, biometrics&touch screens for providing banking access to customers located in remote areas. Mobile banking is the hottest area of development in the banking sector. Mobiles have become ubiquitous and using them for inclusive banking is the next logical step in rural banking system. To conclude, financial inclusion can emerge as commercial profitable business. Only the banks should be prepared to think outside the box. Thus financial inclusion will lead to financial development in our country , which will help to accelerate economic growth.