Dynamics of Financial Inclusion in India

Abstract

“Financial inclusion helps revitalize people out of poverty and can help speed economic development. It can draw more women into the mainstream of economic activity, harnessing their contributions to the society. Indhrawathi Sri Mulyani according to the Indonesian Finance Minister, a former World Bank Group head.The National Bureau of Economic Research claims that “12.4% of those in the top quartile of financial knowledge relied on books and newspapers as their primary source of financial knowledge, compared to only 3.9% for those in the lowest quartile of financial competence”. Growth that is inclusive can only occur via appropriate mechanisms that channel all their sources from top to bottom with innumerable sources from the economy.

             Given that India has the largest rural population in the world, financial inclusion is a novel idea that uses creative methods to encourage rural residents to open bank accounts. The goal of financial inclusion is to offer banking and financial services to the whole population at a reasonable cost in a fair, transparent, and equitable manner. However, low-income households frequently do not have access to bank accounts and must pay for numerous visits and time to obtain banking services, such as opening a savings account or obtaining a loan. As a result, these families find it more challenging to save money and make long-term financial plans.  The concept of financial inclusion, its evolution, IFI, needs, benefits, customer engagement strategies, initiatives, expansion and modes of financial inclusion like ATMs branch openings, loan utilization, mobile transactions, etc. are all insisted upon in this comprehensive study. An attempt is made to address the general topic of financial inclusion in India in this paper.