Financial

Inclusion
What it is and How it helps economy
Some facts

 Around 15-20% people does not have ban accounts earlier it was 65% before
jan dhan yojana.
 30-40% India's poor depend on local money lenders on unreasonable rates like
lagaan system during British period
 People taking insurance is very low in number
 Only cash transactions in rural areas
What is financial inclusion

 Is the delivery of financial services at affordable cost to lower income groups or financial
services to those who cannot afford
 Honestly now a days its even more than this and can be called as to delivery of financial
services to every individual in the society.
1. Access
2. Affordability
3. Simplicity
4. Appropriateness (example language barriers)
5. Quality
6. Financial education
7. Innovation
8. Flexible
9. Speed
Benefits to individual

 Making habit of people to save money and get interest from banks
 Helping people by giving loans from banks in which they have deposited money instead going over to the
people in the society like money lenders and people which exploit them on the basis of interest rates or
lagaan. (Microfinance)
 Filling the gaps and leaks in welfare schemes and subsidies.
 Day to day transactions easier and on paper
 Plan and pay recurring expenses like telephone bill, school fees etc or we can say manage your expenses
easily
 Improvement in overall welfare by increase in purchasing power of individual and mitigating shocks
 Removing inequality by having more opportunities in many areas
 Increasing risk taking ability and self esteem
 Insurance through jan dhan yojana and sense of security for family
 Subsidy in accounts i.e demand is equivalent to supply
 Empowerment of women
Benefits to country economy

 More money in banks helps providing loans to people and business on lower interest rates
 Financial stability to economy in times of depression
 Cashless economy
 Higher and better productivity and enabling competition which lowers the rates of products
ultimately
 Overall development or we can say widespread development in all area enabling faster growth in
economy
 Global recognition and reduction of poverty
 Increase in national income
 Increase in employment and income opportunity or jobs
 Correction of leakage in demand and supply(example implementation of schemes, subsidy
transfer, distribution channels leakage etc)
 No middle agent
Steps taken by central government

 Pradhan Mantri Jan Dhan Yojana

 Gold Monetization
 Mudra Yojana
 Direct Benefit Transfer(DBT)
 Demonetization
 Pushing of cashless transaction by mobile banking and Aadhar enabled
banking system
 Providing Rupay debit cards to farmers
Steps taken by RBI

 Easing the KYC norms(People getting credit cards in a easier way)

 Banking services reaching door to door via business correspondents(Bank
personnel organising camps in villages)
 Electronics benefits transfer (NEFT\RTGS) later on NPCI handling IMPS and UPI
services
 Allowing technology to have key role
 Allowing more banks license
 Allowing banks to open branches in rural areas
Win-Win
Situation