Financial inclusion and Indian Banking System-A combo of integral and inclusive growth process

Indian economy has the central objective of ‘Growth with Equity’ right from the inception of planning process. Government has been taking various measures to achieve the same from many years and Financial Inclusion is prioritised among them. The phrase of Financial Inclusion objects at providing the financial services at affordable cost to those who are excluded from the formal finance system. This can be achieved if the basic banking services are made accessible to all. Perhaps, this is very vital also for sustaining long term equitable development. The three major aspects of financial inclusion are: (i) Accessing to financial market.(ii)Accessing to credit market. (iii) Learn financial matters. In recent years, there has been growing emphasis by the Government and the Reserve Bank on providing formal financial services to the hitherto unbanked/under banked areas. A multi-pronged strategy has been adopted to enhance the outreach of banking services across all sections of society. In order to achieve the objective of universal financial inclusion, banks have been directed to use a combination of strategies, which include:(a) Provision of basic banking products (b) Introduction of Business correspondent/Business Facilitator (BF) model(c) Relaxation of existing regulatory guidelines in the form of lenient Know Your Customer (KYC) norms(d) Enhanced use of technology and (e) Setting up financial literacy and credit counseling centres in districts to achieve greater outreach.

The current study aims at an empirical evaluation of financial inclusion growth in the Indian banking system and also looks insight to understand the growth process of Indian banks by integrating and inclusion of the same. The study evidences that there has been a better growth of rural banking and services so far and much more is anticipated with a countable quantum of problems.