Indian bankingsector hasarich historyand heritage. Banking isa business in financial intermediation where one group of people deposits money with the bank and other group utilizes the same money by availing loan fromthebank for income generating activities. Thegrowth ofan economy largely depends onthelevelof economic development. The performanceof thefinancial sector adds value interms of overall economic growth that a country aims at. Traditionally, the role of banking sector was restricted to provide finance to the needy sectors but lack ofaccess to the financesectors often createdobstacles for the desired growth level. In most of the developing countries, access to finance is a problem. As is usually seen, bank lending is clearly biased to those borrowers who provide collaterals and therefore considered bankable. Due to scarcity of funds, credit starved people often borrow from unorganized players at usurious rates. With changing times, demand for certain other types of financial products have also emerged slowly. India is a developing economy where all the sectors have not yet been able to derive benefits of banking services which would have helped a rapid growth of the economy.
The basic functions of a bank can be summarized as follows:
Toprovidesafetytothe savingsof customers, Tocreatecredit and increase supplyof money, To encourage public confidence in the financial system, To mobilize the savings of public, To increase its network so as to reach every segment of the society, To provide financial services to all customers irrespective of their level of income, To bring in social equity by providing financial services to every stratum of the society The concept of financial inclusion is quite old in India but it has changed its nature and dimensions at different phases in the past. The establishment of Regional Rural Banks, cooperative societies, primary agricultural societies and introduction of priority sector credit guidelines are some of the stateled initiatives which predominantly playedan important roleto develop a sound financial infrastructure for the betterment of the poor and vulnerable sections of society associated with agricultural sectorand other allied sectors. But over the years it has been suggested in various literatures that thecoreaimofthis typeof financial inclusion may not beable touplift the livelihood of thepoor to an appreciableextent. So, timehas cometo think about a new approachto implement the financial inclusion programmes. A paradigm shift can be expected as the very nature of the inclusion may change considerably over a period of time. Today, the inclusion is not restricted to any one sector; rather it targets human beings as a whole as part of the financial inclusion programmes. As most of the people are moving away from traditional farming activities to other jobs both in organized as well unorganized sectors, time has come to examine critically the rationality of providing credit only to agricultural sectorat a subsidized rate. Other emerging sectors can become part of thatwhereprospects of income generating opportunities are more. More importantly people's demands for diverse nature of financial products have also raised the level of expectations from financial service providers. Increasing level of literacy may be one of the primary reasons for this kind of changes.
So financial inclusion can be re-defined as a method through which financial institutions are to provide different types of financial products including credit. Too much focus on credit will lead to inefficient distribution of resources and if the credit has not been utilized in income generating activities then surely rural people will not be able to come out from poverty traps. Thus, through financial inclusion a package of products can be developed which not only help to improve the livelihood of the poor people, it will also be able to help them to face any kind of contingencies.
Given the massive drawbacks of the previous programmes, the Government of India has introduced a plan for financial inclusion and named it as “Pradhan Mantri Jan Dhan Yojana” (PMJDY). The programme was announced and inaugurated on 15th August, 2014 and has started the operation on 28th August, 2014. The initial target was to open bank accounts amounting to 7.5 crores by January, 2015 but most of the banks have overachieved the target and have been able to open 13 crore bank accountswithin thestipulated deadline.2PMJDY is a technology based financial inclusion programme implemented by the government. Unlike other financial inclusion programmes, the objective here is not to cover the rural population only. It covers both rural as well as urban population. The push based strategy helped to move the things ahead. The major challenges as faced by the previous programmes were to keep the accounts active. To deal with this issue the government has decided to link transfer of various direct benefits social welfare schemes with the accounts. As the target is not to cover any specific geographical area, the system is able to capture households who do not have bank accounts or access to any kind of financial services. The wide application of technology like RuPay debit card, mobile banking facilities, and e-KYC also helped the process to go smoothly. As there were monitoring problems in the previous programmes, these facilities help to track the implementation properly.
The key benefits of PMJDY can be Direct Benefit Transfer, Insurance Benefits, Loan Benefits, and Mobile Banking Facility. The Objectives of the Study is to examine the various causes of financial exclusion in the study area, to ascertain the perception about PMJDY in the study districts and to know the implementation of PMJDY.
To get a detailed idea about the above mentioned objectives, a detailed study has been conducted in the study area. The response has been analysed and the hypotheses developed for the study purposes are analysed accordingly.
