Financial Inclusion and Financial Deepening: An Overview

India possessed all the elements for success in the competition a wide range of institutional types, well-developed financial markets, a good regulatory framework, and large scale and high-quality authentication and transaction platforms. Access to financial services to low-income households and small businesses is not a new goal for India. may be noticed that 90 percent of small businesses have no links with formal financial institutions and 60 percent of the rural and urban population do not even have a functional bank account. And, while the bank credit to Gross Domestic Product (GDP) ratio in the country as a whole is a modest i.e. 70 percent, in a large state such as Bihar, it is even lower at a mere 16 percent. This has left a large part of the economy dependent on the informal sector for meeting its credit needs. On the savings front, difficulties of access combined with an absence of a positive real return on financial savings, has accelerated the move away from financial assets to physical assets and unregulated providers.