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Abstract
The main focus of the present article is to understand the structural dimensions of contemporary societies and their reality with functional approaches. An attempt has also being made to review the importance of financial inclusion in relations with economic condition of country and the support system of international financial institutions. Specifically the role of government with recommendations, regulations and policies along with the role and significance of technology accompanied with the role of NGOs and private financial organizations are critically be discussed in the present paper. Efforts would be made to review the realities related to the process and achievement of financial inclusion in United Kingdom, China and India. The major component of this article is to describe and access inclusion and growth in India .Some the areas including issues and challenges are objectively being analyzed. Key words: Financial Inclusion; Global Efforts and Implication; Recommendations, Regulations , Role and significance of Policies.
Objectives
The importance of this study lies in the fact that India being a socialist, democratic republic, it is imperative on the policies of the government to ensure equitable growth of all sections of the economy. In the recent years there has been growing realization among the developed and developing countries concerning about the upliftment of financially backward sections of the society, by proving them proper and adequate financial support which could be provided by the process of Financial Inclusion . Some objectives of this study are as follows: 1. To understand the process of Financial Inclusion in India. 2. To highlights Impact of Global Efforts and Implication. 3. To observe the impact of the Recommendations from different regulating authorities. 4. To understand the Regulations and policies 5. To find out the Role and significance s of various organizations. These roles , regulations and policies help to analyze and provide , as well as improve the financial inclusion process in our country. -----------------*Post graduate Student, Department of Commerce, University Teaching Department, Barkatullah University Bhopal. E-mail ; sid7828780838@gmail.com , Mobile: 09893114541
Introduction
The financial inclusion is a process to extend the scope of activities of organized financial system and to include people with low incomes, by which an attempt is being made to uplift the poor from one level to another so that they transcend poverty. In fact, financial inclusion provides access to finance in form of empowering the vulnerable groups. Financial inclusion denotes delivery of finance and services at an affordable cost to the vast sections of the disadvantaged and low-income groups. The various financial services include credit, savings, insurance, payments and remittance facilities. This has to become an integral part of our efforts to promote inclusive growth. The realities of contemporary societies being reflected by about 2.9 billion people around the world who do not have access to formal sources of banking and financial services. In India alone approx 560 million people are excluded from formal source of finance, a figure in tight correlation with the 41.6 percent (457 million) of the population that still lives below the poverty line (US$1.25/day). But at the same time if we talk about India which has enjoyed growing domestic demand and globally recognized prowess in the areas of information technology, automotive, life sciences, telecommunications and its continued success and growth as an economic power (in common with other emerging economies) can only be assured if concrete steps are taken to ensure that the social and economic development is inclusive.
Marketing making most of the Government Policy in extending banking reach to the last mile and remote Indian locations. Just like SAMVRIDDHI(SIGN) various other not for profit NGOs are working towards providing finance to unfinanced areas of India. Some of them are SANCHAYAN,SWADHAAR and various other micro finance self help groups who have collaborated with various banks and are providing financial knowledge and services to remote areas where reaching would be difficult for any other financial institution. C. The role of private financial institutions Nachiket Mor the panel head of RBI, directed to create universal electronic bank account for all adult Indian citizens by January 2016, Private Banks are instructed by the RBI to open at least 40 percent of their branches in rural areas before opening them in urban areas , so as to promote financial services in un bankable areas. D. The role of technology Government policies have laid a strong foundation wherein technology has helped to spread the reach of financial services. Some of the technology solutions being implemented today are Smart Cards, Biometric ATMs, Point of Service Devices and Mobile Phone Applications. Leading banking and financial institutions are engaged in providing banking services to the financially underserved through pilots or limited commercial rollouts using either one or multiple technologies cited above. However, the needs of the vast majority of the underserved and unbanked have not yet been addressed. Technology solutions are being promoted to address the scalability challenges facing financial inclusion in India and other developing countries. Amidst the ever-changing technology landscape, Selfservice has emerged as the foremost scalable and sustainable solution.
India The government of Indias National Rural Financial Inclusion Plan (NRFIP) has set a target to achieve complete financial inclusion by 2015. The plan aims to serve fifty percent of the financially excluded (280 mn) population by 2012 through regional and semi-urban branches of commercial and regional rural banks. The opening of Bharatiya Mahila Bank will help improve financial inclusion and growth in India. To help achieve these goals, two funds of about US$125 millions each have been allocated the Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund (FITF). The objectives of the FIF is to support "developmental and promotional activities" with a view of securing greater financial inclusion, particularly among weaker sections, low-income groups and in under developed regions and hitherto unbanked areas. Current banking infrastructure in rural India relies on the manual delivery of services. This presents a massive hurdle in reaching out to the sheer number and geographical spread of the financially underserved population. In matching the FIF with the FITF, the government has given equal importance to the development of technology that can provide scalable and sustainable solutions for inclusive growth. Specifically, the objectives of FITF are to enhance investment in Information and Communications Technology (ICT) which aims at stimulating research and technology innovation in the area of financial inclusion, increase the adoption of technology among financial services providers and users, and encourage an environment of innovation and cooperation among stakeholders. The government has also set up a Committee on Financial Inclusion under the chairmanship of the exgovernor of the Reserve Bank of India (RBI), Dr. C Rangarajan, to study the pattern of exclusion, identify barriers, review international experience and provide recommendations for achieving the objectives of financial inclusion.
It is essential for any economy to aim at inclusive growth involving each and every citizen in the economic development progression.
Suggestions/Findings
Micro-finance Institutions (MFIs) or self-help group deliver doorstep banking is the most persuasive model today supporting the governments drive towards Financial Inclusion. The Business Correspondent (BC) model offers a lower cost channel and local presence without the infrastructure costs of branches. However, it is limited by poor security, time-consuming manual processes and a lack of scale. Supplementing the BC model with technology can improve security, speed up enrolments and transactions, and extend the size of the physical territory that agents can cover. Even with enabling technology, the agent model in isolation, will always be limited to the size of the physical territory that can be covered. In addition to assisting or supplementing an existing, labor-intensive delivery channel, technology can become a direct delivery channel for financial and information services. This is particularly true of selfservice technology (e.g. ATMs, mobile phones) where transactions are driven by the consumer without third party interventions. Once the unbanked are bought into the banking model, a whole range of financial services can be delivered through self-service technology, with minimal need for person to person interaction. Self-service technologies are the foremost sustainable and scalable solutions because they offer multiple products and services from the same platform/device, at lower costs, ease-of-use, higher levels of availability and accessibility by the potential of leveraging existing physical infrastructures (i.e. merchant partners and kirana stores) as a distribution channel. Self-service can provide the scale necessary to achieve the Indian governments target of full Financial Inclusion by 2015.
Conclusion
To conclude, Financial Inclusion provides formal identity, access to payments system & deposit insurance , the Importance of financial inclusion arises from the problem of financial exclusion of nearly 3 billion people from the formal financial services across the world. With only 34% of population engaged in formal banking sector , India has about 135 million financially excluded households, the second highest number after China. Further, the real rate of financial inclusion in India is also very low and about 40% of the bank account holders use their accounts not even once a month. Financial Inclusion has far reaching consequences, which can help many people come out of object poverty conditions. The financial inclusion has extended the scope of activities of the organized financial system to include within its ambit people with low incomes. Through graduated credit, activities have shown positive efforts to lift the poor from one level to another so that can overcome poverty. There is a need for coordinated efforts between the banks, the Government in a one side and facilitate access to bank accounts amongst the financially excluded on the other side.
References
1. RBI press release on 7-jan-2014 http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=3035
2. http://samvriddhi.com/ 3. sanchayansociety.org/ 4 . www.rbi.org.in Speeches on 6-sep-2013 5. http://www.epw.in/special-articles/challenges-financial-inclusion-india.html by S Ananth and T Sabri Vol XLVIII No. 07, February 16, 2013 article in economic and polity weekly 6. Speech by Governor Raghuram G. Rajan at BANCON 2013 : held at Mumbai on November 15, 2013 http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=856 7. Raghuram Rajan: Financial inclusion - technology, institutions and policies : Keynote address by Dr Raghuram Rajan, Governor of the Reserve Bank of India, at the NASSCOM (The National Association of Software and Services Companies) India Leadership Forum, Mumbai, 12 February 2014. 8. RBI Governor Raghuram Rajans report to be lynchpin of financial sector reforms : Deepshikha Sikarwar, ET Bureau Sep 16, 2013, 07.06AM IST 9. Financial Inclusion in India Challenges & Opportunities by Anuraj Soni on April 9, 2013 Published under Ecosystem 10. www.rierc.org/business/paper26 Chattopadhyay, S. K. (2011) 11. www.ijars.in/iJARS%20630 Manuscript Id: iJARS/630 12. www.icicigroupcompanies.com/financial_inclusion_efforts.html 13. articles.economictimes.indiatimes.com Collections Icici Bank 5-sep-2013 14. www.jrf.org.uk Publications Jul 15, 2008 15. en.wikipedia.org wiki inancial inclusion 16. Research Unit for Financial Inclusion www.ljmu.ac.uk Education, Health and Community 1 . www.birmingham.ac.uk ... inancial-inclusion-report- 13-final.pdf We wish to thank the UK Data Service for supplying the datasets used in this research project