particular at an affordable cost in a fair and transparent manner by mainstream institutional players.

The above definitions give importance to accessibility of credit at an affordable cost to the disadvantaged sections of the society. In brief, the broad area of financial inclusion not only provides an enabling environment to use financial services but also removes both external and internal constraints that stand in the way of people becoming a part of the formal financial system.

The banking industry has shown tremendous growth in volume and activities during the last few decades. Despite making significant improvements in all the areas relating to financial viability, profitability and competitiveness, it has seen that banks have not been able to include vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services. Majority of people in the developing world do not have access to formal financial services, very few get benefited from savings accounts, loans, or convenient way to transfer money. Financial services for the poor, generally referred to as microfinance, cannot solve all the problems caused by poverty; but they can help to put resources and power into the hands of poor and low income people to change their own paths out of poverty. The potential is enormous through inclusive financial system which is the only way to reach to the large number of poor and low income people. (Leeladhar, 2005)

II. OBJECTIVES OF THE STUDY:

The paper has been conceived with the following objectives in mind:

1. To discuss about the conceptual aspect of Financial Inclusion.

2. To analyse various important regulatory initiatives taken by the RBI and GOI Regarding financial inclusion.

3. To examine the role of banking sector in financial inclusion, including various problems and prospects associated with it.

III. METHODOLOGY:

The present study is descriptive in nature. The data used for the study is secondary in nature and has been collected from various books, journals and magazines such as Economic Survey, Planning Commission report, RBI bulletin, annual reports of RBI, Report on trend and progress of banking in India, SLBC Reports, websites of RBI, NABARD and Ministry of Finance, Government of India.

IV. GLOBAL EXPERIENCES:

In developed countries, the formal financial sector comprising mainly the banking system, serves most of the population, but in developing countries, a large segment of the society, particularly the low-income group, has little access to financial services, either formal or semi formal. As a result, many people have to necessarily depend either on their own sources or informal sources of finance (private finance), which are generally at high cost. Table-1 shows the percentage of population having a Bank Account in a few countries.

Table: 1 Percentage of Population with a Bank Account

Sl. No	Country	Percentage with account
1	Brazil	43
2	Canada	94
3	Denmark	99
4	France	96
5	Italy	70
6	India	59
7	South Africa	32
8	Sweden	98
9	UK	88
10	USA	91

Source: Fed bank Hormis Memorial Foundation Inaugural Address by V. Leeladhar, Deputy Governor, RBI, December 2, 2005.

The United Kingdom was one of the first countries to realize the importance of financial inclusion. It published its strategy of financial inclusion in its report “Promoting Financial Inclusion” which was published alongside the pre budget Report of 2004.The UK Financial Inclusion Task Force has identified three priority areas for the purpose of financial inclusion, viz., access to banking, access to affordable credit and access to free face-to-face money advice. UK has also established a Financial Inclusion Fund to promote financial inclusion and assigned responsibility to banks and credit unions in removing financial exclusion. Basic bank no frills accounts have also been introduced.

A civil rights law, namely Community Reinvestment Act 1977 (CRA) in the United States prohibits discrimination by banks against low and moderate income neighborhoods. The CRA imposes an affirmative and continuing obligation on banks to serve the needs for credit and banking services of all the communities in which they are chartered.

The law of exclusion in France makes holding bank account as a right. South Africa has ‘MZANSI’ account (a National Bank Account) which is a low cost card-based savings account with easy accessibility.

Mexico has a microfinance program called ‘PATMIR’ (Regional Project for Technical Assistance to Rural Microfinance) where savings take precedence over credit. Canada has free encashment of government cheques even for non-customers.

In Germany, a voluntary code was introduced by the German Bankers Association in 1996. This makes provision for an 'everyman' current account, offering basic banking transactions, without an overdraft facility (Caskey et al, 2006).

V. FINANCIAL EXCLUSION:

Financial exclusion refers to the process that prevents poor and disadvantaged social groups from gaining access to the financial system. It means the inability to access necessary financial services in the appropriate form due to problems associated with access, conditions, prices, marketing or self-exclusion. The European commission (2008) defines financial exclusion as “a process whereby people encounter difficulties accessing and / or using financial services and product in the mainstream market that are appropriate to their needs and enable them to lead a normal social life in the society in which they belong”.

The marginal sections of population in rural as well as urban areas are mainly excluded from the formal financial system. This marginal section largely comprises marginal farmers, landless labourers, self employed and unorganized sector enterprises, urban slum dwellers, migrants, ethnic minorities and socially excluded groups, senior sector and women.

There is variety of reasons for financial exclusion:

a. Remote, hilly and sparsely populated areas with poor infrastructure acts as a deterrent.

b. From the demand side, lack of awareness, low incomes/ assets to save, social exclusion, illiteracy act as barriers.

c. From the supply side, distance from branch, branch timings, unsuitable products, language, staff attitudes.

d. Higher transaction cost.

e. The ease of availability of informal credit sources, etc.

Census 2011 estimated that out of 24.67 crore households in the country, 14.48 crore (58.7%) household had access to banking services. Of the other 16.78 crore rural households, 9.14 crore (54.46%) were availing banking services. Of the 7.89 crore urban households, 5.34 crore (67.68%) households were availing banking services.

In India, 51.4 percent farmer households are financially excluded from both formal and informal sources. Of the farmers’ households, only 27 percent access formal sources of credit, one third of this group also borrow from non-formal sources. Overall, 73 percent of farmer households have no access to formal sources of credit.

Exclusion is most acute in Central, Eastern and North-Eastern regions- having a concentration of 64 percent of all financially excluded farmer households in the country. Overall indebtedness to formal sources of finance alone is only 19.66 percent in these three regions.

Marginal farmer households constitute 66 percent of total households. Only 45percent of these households are indebted to either formal or non-formal sources of finance. About 20 percent of indebted marginal farmer households have access to formal sources of credit. Only 36 percent of ST Farmer households are indebtedness mostly to informal sources.(Agarwal 2008)

VI. FINANCIAL INCLUSION IN INDIA- BRIEF HISTORY:

India has deep root of financial inclusion. The Indian Government has a long history of working to expand financial inclusion. In 1904 co-operative movement has been started which was milestone in Indian economic history. After independence the GOI adopted planned economic development for the country. Accordingly, five year plans came into existence since 1951. 430 commercial banks were in the private sector those days. These banks are failed to helping GOI in their social objectives. Thus, on 19th July, 1969 14 major commercial banks were nationalized. It was a big step towards financial inclusion. It has boost up the banking sector of India. In the same year National credit committee (NCC) come with the concept of lead bank scheme which was headed by Prof. D R Gadgil. Narsimhan committee is conceptualized the foundation of regional rural banks in India. The committee felt the need of 'regionally oriented rural banks' that would address the problems and requirements of the rural people with local feel. RRBs have been established in 1975 by Government of India with the same aim. The main goal of establishing regional rural banks in India was to provide credit to the rural people who are not economically strong enough, especially the small and marginal farmers, artisans, agricultural labours, and even small entrepreneurs. It encouraged branch expansion of bank branches especially in rural areas.

In February 1992, SHG-Bank Linkage Programme has been launched by NABARD as pilot project during the period of economic reforms in India which was major initiative in financial inclusion. It proved to be a revolutionary programme for alleviating poverty through capacity building and empowerment of the rural poor, especially women. Microcredit extended either directly or through any intermediary is considered as part of bank’s priority sector lending. The SHG-bank linkage programme provides opportunities for the rural poor to participate in the development process. It is cost effective, and ensures that more and more people are brought under sustainable developmental activities, within a short span of time. Under this programme, 69.5 lakh SHGs were maintaining savings bank accounts and 48.5 lakh credit linked SHGs covering more than 9.7 crore households as on March 31, 2011. The Kisan Credit Card (KCC) scheme was introduced in 1998. It provides timely and hassle free short term loans. As on 31st March 2012, the total number of KCCs issued has been reported as 30 million with a total amount outstanding to the tune of Rs. 2,068 billion. The Swarojgar Credit Card (SCC) Scheme was introduced by NABARD in 2003 for facilitating hassle free credit for meeting investment and working capital requirements of small borrowers and rural micro-entrepreneurs. As on 31st March 2012, the banking system had issued 13.06lakh cards involving credit limits of Rs.5445.32crore. Recent simplification of KYC norms is another milestone. With the directive from RBI, banks are now offering “No Frill” accounts to low income groups. These accounts have a low minimum or nil balance. It comes with the concept of business correspondent in 2006. Financial inclusion is an attempt to bring larger community under the umbrella of formal credit and alleviate poverty in rural areas.(RBI 2014)

VII. Initiatives taken by RBI and Government of India towards financial inclusion:

As per Census 2011, 58.7% households are availing banking services in the country. There are 102,343 branches of Scheduled Commercial Banks (SCBs) in the country, out of which 37,953 (37%) bank branches are in the rural areas and 27,219 (26%) in semi-urban areas, constituting 63 per cent of the total numbers of branches in semi-urban and rural areas of the country. However, a significant proportion of the households, especially in rural areas, are still outside the formal fold of the banking system. To extend the reach of banking to those outside the formal banking system, Government and Reserve Bank of India (RBI) are taking various initiatives from time to time some of which are enumerated below:-

Table-3: Bank Group-wise Number of commercial bank branches as on 31.03.2013

Bank Group	Rural	Semi-urban	Urban	Metropolitan	Total
Public sector	23286	18854	14649	13632	70421
Private sector	1937	5128	3722	3797	14584
Foreign Banks	8	9	65	249	331
Regional Rural Banks	12722	3228	891	166	17007
Total	37953	27219	19327	17844	102343

Source : RBI Bulletin, March 2014

1. Branch Expansion:

Nationalisation of commercial banks in India in 1969 and 1980 was a pioneering step towards accessibility of banking services to the vast rural population of the country. This was a significant effort towards financial inclusion, which led to the spread of bank branches in unbanked areas. There has been a consistent increase in the penetration of banking services in India in recent years. However the rate of increase in the penetration of banking services in rural and semi-urban areas has been much lower than that in the urban areas. In order to address this issue, the branch authorisation policy was liberalise in December 2009 giving freedom to domestic scheduled commercial banks to open branches at Tier 3 to 6 centres without having the need to take permission from RBI in each case, subject to reporting. Government had issued detailed strategy and guidelines on Financial Inclusion in October 2011, advising banks to open branches in all habitations of 5,000 or more population in under-banked districts and 10,000 or more population in other districts. Out of 3,925 such identified villages / habitations, branches have been opened in 3,402 villages/ habitations (including 2,121 Ultra Small Branches) by end of April, 2013.

Table -4: Number of schedule commercial bank (SCB) offices across India.

	2003		2007		2011		2013
	Number	%	Number	%	Number	%	Number	%
Rural	32283	47	30409	41	33602	36	37953	37
Semi-rural	15135	22	16770	22	23048	25	27219	26
Urban	11566	17	14202	19	19156	21	19327	20
Metropolitan	9516	14	13272	18	17274	19	17844	17
Total	68500	100	74653	100	93080	100	102343	100

Source : RBI Bulletin, March 2014.

Table -5: No. of functioning branches of Scheduled Commercial Banks during last five years:

As on	Rural	Semi-urban	Urban	Metropolitan	Total
March 31, 2009	31476	19126	15273	14325	80200
March 31, 2010	32493	20855	16686	15446	85480
March 31, 2011	33905	23114	17599	16419	91037
March 31, 2012	36356	25797	18781	17396	98330
March 31, 2013	37953	27219	19327	17844	102343

Source : RBI Bulletin, March 2014

Table -6:No. of branches of Scheduled Commercial Banks opened during five years:

Year	Rural	Semi-urban	Urban	Metropolitan	Total
2008-09	706	1290	1046	953	3995
2009-10	1021	1729	1417	1139	5306
2010-11	1422	2258	919	981	5580
2011-12	2453	2686	1186	982	7307
2012-13	1598	1422	546	451	4017

Source: RBI Bulletin, March 2014

2. Business correspondent (BC) model:

A significant step towards financial inclusion was the issue of RBI guidelines in January 2006 for engagement of Business Correspondents (BCs) by banks for providing banking and financial services. Under this BC Model, banks have been permitted to use the services of various entities like Non- Governmental Organisations/Self Help Groups (NGOs/SHGs), Farmers Club (FC),Micro Finance Institutions (MFIs) and other Civil Society Organisations (CSOs), companies registered under Section 25 of the Companies Act, 1956, retired Government/bank employees and ex-servicemen to act as BCs. Based on the recommendations of the Working Group constituted to examine the experience of the BC Model, banks were allowed to appoint as BCs: individual owners of kirana/medical/Fair Price shops/individual PCO operators, agents of small savings schemes of GOI/Insurance companies, individuals who own petrol pumps, retired teachers, authorized functionaries of well run self help groups which are linked to banks and any other individuals including those operating common service centre as BCs.

3. Business Facilitator (BF):

As per extent RBI guidelines , banks are engaged to use intermediaries, such as NGOs, Farmers Clubs, cooperatives, community based organizations, post offices, insurance agents, well functioning Panchayats, etc. as Business Facilitator for providing facilitation services, viz. identification of borrowers and fitment of activities, collection and preliminary processing of loan applications including verification of primary information\ data, creating awareness about savings and other products and education and advice on managing money and debt counselling, etc.

4. Financial Literacy:

Financial literacy is instrumental in expanding financial inclusion, which in turn is helpful in further expanding financial literacy, thus mutually reinforcing each other in a positive manner(Chakrabarty, 2011).RBI has taken number of measures to increase financial literacy in the country. It has set up a multilingual website in 13 languages explaining about banking, money etc. It has also undertaken a project titled “Project Financial Literacy”. The objective of the project is to disseminate information regarding the central bank and general banking concepts to various target groups, including, school and college going children, women, rural and urban poor, defence personnel and senior citizens.

5. Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF):

As recommended by the Rangarajan Committee, two Funds have been set up with NABARD during 2007-08, viz., ‘Financial Inclusion Fund’ (FIF) for meeting the cost of developmental and Promotional interventions of financial inclusion and ‘Financial Inclusion Technology Fund’ (FITF), for meeting the cost of technology adoption. Each Fund consists of an overall corpus of 500 crore, to be contributed by the Government of India (GOI), Reserve Bank of India and NABARD in the ratio of 40:40:20 in a phased manner over five years, depending upon utilization of funds. In the Union Budget for the year 2010-11, the corpus of each of these funds has been enhanced by another 100 crore. The guidelines for these two funds have been formulated and circulated among stakeholders. As on March 31, 2010, 50,255 villages were covered under financial inclusion through FIF and FITF. (NABARD, 2011)

6. NABARD-UNDP Collaboration for Financial Inclusion:

In addition to financial inclusion initiated Under FIF/FITF, NABARD and UNDP entered into Collaboration for financial inclusion in seven focus states, viz., Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh. This collaboration was part of the Country Programme Action Plan (CPAP) signed between Government of India (GOI) and UNDP. A fund for the collaboration, viz., ‘UNDP – NABARD Financial Inclusion Fund’ was established in NABARD with UNDP support (NABARD, 2011). The overall objective of the collaboration is to provide better access to financial products and services to enhance livelihoods for the poor in at least two states, especially women and men from SC and ST groups, minorities and the displaced.

7. No Frill Accounts:

Reserve Bank of India advised banks, in November 2005, to make available basic banking ‘no frills’ account. Normally, the savings account requires people to maintain a minimum balance and most banks now even offer various facilities with the same. No Frill Accounts requires no or negligible balance and is without any other facilities leading to lower costs both for the bank and the individual. Banks have been advised to provide small overdrafts in such accounts. Recently RBI has changed the nomenclature from NFAs to Basic Savings bank account. This initiative of RBI proved to be very effective as the banking system has opened 139 million no frills accounts amounting to Rs.126 billion by March 2012 under the financial Inclusion Plan.

8. Relaxation on know-your-customer (KYC) norms for opening of no frill accounts:

KYC requirements for opening bank accounts were relaxed for small accounts in August 2005, thereby simplifying procedures by stipulating that introduction by an account holder who has been subjected to the full KYC drill would suffice for opening such accounts. The banks were also permitted to take any evidence as to the identity and address of the customer to their satisfaction.

9. Introduction of General Credit Cards (GCCs):

With a view to helping the poor and disadvantaged with access to easy credit, banks have been asked to consider introducing General Purpose Credit Card facility up to Rs 25,000 at their rural and semi urban branches. GCC is in the nature of revolving credit entitling the holder to withdraw up to the limit sanctioned. The limit for the purpose can be set based on assessment of household cash flows; the limits are sanctioned without insistence on security or purpose. The interest rate on the facility is completely deregulated. A simplified mechanism for one time settlement of overdue loans up to Rs. 25,000 has been suggested for adoption.

10. Regional Rural Banks (RRB):

RRBs are actively involved in promoting financial inclusion by opening “No Frill Accounts”, issuing Kisan Credit Cards and General Credit Cards and dispensing micro credit under the SHG-Bank Linkage Programme. Considering the strategic importance of RRBs in the acceleration of financial inclusion RBI has directed sponsor banks to implement Core Banking Solutions (CBS) in all RRBs by September 30, 2011. Fifteen RRBs were identified from 14 States for RandD project on financial inclusion with ICT-based solutions, through use of smart cards, Point of Sale (POS) devices and mobile technology, in different regions and client groups in the country. Starting from a single bank branch in 2^nd October, 1975, today around 15475 branches are operating across India.(AGVB 2013)

11. Rural Cooperative Credit Institutions:

It was announced in the Annual Policy Statement for the year 2010-11 that there was a need for better understanding of the functioning of grass-root level rural co-operatives, which have the potential to play an important role in financial inclusion. Accordingly, a study of select ‘well functioning’ rural co-operatives (around 220) across the country was conducted through the Regional offices in association with the Regional offices of NABARD and the concerned State Governments under the overall guidance of Reserve Bank.

12. Financing joint liability groups (JLG):

The Rangarajan Committee (Government of India, 2008) had recommended that adoption of the Joint Liability Group concept could be another effective method for providing credit to mid-segment clients such as small farmers, marginal farmers, tenant farmers, etc. and thereby reduce their dependence on informal sources of credit. Studies conducted by NABARD, have shown that financing of JLGs is a good business proposition and thereby NABARD has issued comprehensive guidelines on JLGs to banks focussing on small and marginal farmers, oral lessees and other clients under non-farm activities. NABARD supports banks for nurturing and financing of JLGs for the initial three years.

13. Banking services in unbanked villages:

In November 2009, the Reserve Bank has advised banks to draw up a roadmap to provide banking services through a banking outlet in every village having a population of over 2,000 by March 2011. Such banking services may not necessarily be extended through a brick and mortar branch but can be provided through any of the various forms of ICT-based models including through BCs. The target date for achievement of above has been revised to March 2012 in alignment with the Budget announcements. Banks were further advised that March 2011 may be considered as an intermediate target. As at end June 2010, about 73,000 villages have been allocated to various banks for the provision of banking facilities in villages having population of more than 2000. There are 3250 villages in the NER falling into this category of over 2000 population and all these villages had been provided with banking facilities by March 2012 , either through Brick and Mortar Branch or Business Correspondent or Mobile Van.(RBI 2012)

14. Technological Innovations:

A few Pilot projects have been initiated to increase financial inclusion through ATM expansion in rural areas, CBS, Smart Cards, Biometric Cards, Mobile Banking, ICT-enabled mobile banking vans etc. The percentage of ATMs located in rural areas accounted for 28.4 percent of the total ATMs in the country at end-March 2009, which increased to 11564 (32.7 percent) at end-March 2013 (RBI, 2013). There were 273.54 million mobile subscribers in Rural India, as on March 31, 2011 (TRAI, 2011). Thus, RBI’s operative guidelines on Mobile Banking issued in October 2008 were reviewed relaxed in December 2009 by enhancing the limits for mobile banking transactions up to INR 5,000 from a bank account to beneficiaries not having a bank account. Moreover, as directed by the RBI schedule commercial banks have prepared ICT- based roadmap for providing banking services to all villages with population above 2,000 falling under the lead district programme by March 2012. In this context ICT- enabled Mobile Banking Vans (MBV) provide efficient and cost-effective banking services in unbanked and remotest corners of the country.

15. USSD Based Mobile Banking: The Department through National Payments Corporation of India (NPCI) worked upon a “Common USSD Platform” for all Banks and Telco’s who wish to offer the facility of Mobile Banking using Unstructured Supplementary Service Data (USSD) based Mobile Banking. The Department helped NPCI to get a common USSD Code *99# for all Telco’s. More than 20 Banks have joined the National Uniform USSD Platform (NUUP) of NPCI and the product has been launched by NPCI with BSNL and MTNL. USSD based Mobile Banking offers basic Banking facilities like Money Transfer, Bill Payments, Balance Enquiries; Merchant payments etc. on a simple GSM based Mobile phone, without the need to download application on a Phone as required at present in the IMPS based Mobile Banking.

16. Swabhimaan Campaign:

Under “Swabhimaan” – the Financial Inclusion Campaign launched in February 2011, Banks had provided banking facilities by March, 2012 to over 74,000 habitations having population in excess of 2000 using various models and technologies including branchless banking through Business Correspondents Agents (BCAs). Further, in terms of Finance Minister’s Budget Speech 2012-13, the “Swabhimaan” campaign has been extended to habitations with population of more than 1000 in North Eastern and hilly States and to habitations which have crossed population of 1600 as per census 2001. About 40,000 such habitations have been identified to be covered under the extended “Swabhimaan” campaign. In the year 2013, Banks covered 74,351 villages with population more than 2000 with banking facilities under the Swabhimaan Campaign with BCs.

17. Setting up of Ultra Small Branches (USBs):

Considering the need for close supervision and mentoring of the Business Correspondent Agents (BCAs) by the respective banks and to ensure that a range of banking services are available to the residents of such villages, Ultra Small Branches (USBs) are being set up in all villages covered through BCAs under Financial Inclusion. A USB would comprise of a small area of 100-200 sq. feet where the officer designated by the bank would be available with a lap-top on pre-determined days. While the cash services would be offered by the BCAs, the bank officer would offer other services, undertake field verification and follow up the banking transactions. The periodicity and duration of visits can be progressively enhanced depending upon business potential in the area. A total of over 50,000 USBs have been set up in the country by March, 2013.

VIII. Steps taken by Reserve Bank of India (RBI 2013)

To strengthen the Banking Infrastructure –

(a) RBI has permitted domestic Scheduled Commercial Banks (excluding RRBs) to open branches in Tier 2 to Tier 6 Centres (with population up to 99,999 as per census 2001) without the need to take permission from RBI in each case, subject to reporting.

(b) RBI has also permitted SCBs (excluding RRBs) to open branches in rural, semi urban and urban centres in North Eastern States and Sikkim without having the need to take permission from RBI in each case, subject to reporting.

(c) Regional Rural Banks (RRBs) are also allowed to open branches in Tier 2 to Tier 6 centres (with population up to 99,999 as per Census 2001) without the need to take permission from the Reserve Bank in each case, subject to reporting, provided they fulfil the following conditions, as per the latest inspection report:

(i) CRAR of at least 9%;

(ii) Net NPA less than 5%;

(iii) No default in CRR / SLR for the last year;

(iv) Net profit in the last financial year;

(v) CBS compliant.

(d) Domestic SCBs have been advised that while preparing their Annual Branch Expansion Plan (ABEP), they should allocate at least 25% of the total number of branches proposed to be opened during the year in unbanked Tier 5 and Tier 6 centres i.e. (population up to 9999) centres which do not have a brick and mortar structure of any SCB for customer based banking transactions.

(e) RRBs have also been advised to allocate at least 25 percent of the total number of branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier 6) Centres).

(f) New private sector banks are required to ensure that at least 25% of their total branches are in semi-urban and rural centres on an ongoing basis.

Direct Benefit Transfer (DBT):

The objective of DBT Scheme is to ensure that money under various developmental schemes reaches beneficiaries directly and without any delay. The scheme has been launched in the country from January, 2013 and has been rolled out in a phased manner, starting with 26 welfare schemes, in 43 districts. The scheme is now being extended to additional 78 districts and additional 3 schemes from 1^st July, 2013 and would be extended to the entire country in a phased manner.

The Government has also started the transfer of cash subsidy for domestic LPG cylinders to Aadhaar linked bank accounts of the customers with effect from 1^st June 2013, in 20 pilot districts. About 75 lakh beneficiaries would be benefitted in these districts.

Banks play a key role in implementation of DBT and this involves four important steps, viz.

(i) Opening of accounts of all beneficiaries;

(ii) Seeding of bank accounts with Aadhaar numbers and uploading on the NPCI mapper;

(iii) Undertaking funds transfer using the National Automated Clearing House – Aadhaar Payment Bridge System (NACH-APBS).

(iv) Strengthening of banking infrastructure to enable beneficiary to withdraw money.

Banks are ensuring that all beneficiaries have a bank account. All Public Sector Banks (PSBs) and RRBs have made provision for Aadhaar seeding in the CBS. All PSBs have also joined the Aadhaar Payment Bridge of National Payments Corporation of India (NPCI). Banks are also issuing debit cards to beneficiaries. Banks have also started action for strengthening banking infrastructure and providing business correspondents in areas, which were so far unserved.

Bharatiya Mahila Bank:

Prime Minister Dr. Monmohan Singh and UPA Chairperson, Sonia Gandhi jointly inaugurated India’s first all-women bank, Bharatiya Mahila Bank in Mumbai on November,19, 2013, on the birth anniversary of former Prime Minister Indira Gandhi. The Main objective of the bank is to focus on the banking needs of women and to promote their economic empowerment. The Union Government on November 12, 2013 appointed Usha Annanthasubramanian as the first Chairperson and Managing Director of Public sector Bharatiya Mahila bank. The bank aims to service women an women-run business, support womens’ self-help groups and their livelihoods and promote further financial inclusion.

Table-7 : State-wise FIP Progress as on 30. 03.2012

Sl. No	Name of the State	Total No. of Villages allotted	No. of Villages covered	No of Villages yet to be covered	Total No. of BC appointed	Total No of accounts opened
1	AandN Islands	9	9	0	9	720
2	Andhra Pradesh	6640	6639	1	6262	2985903
3	Arunachal Pradesh	11	11	0	4	45686
4	Assam	2327	2327	0	629	428695
5	Bihar	9213	9177	36	7097	2944040
6	Chandigarh	0	0	0	0	0
7	Chhattisgarh	1050	1050	0	802	241613
8	DandN Haveli	30	30	0	23	30615
9	Daman andDiu	6	6	0	6	5486
10	Delhi	110	107	3	84	35810
11	Goa	41	41	0	36	6817
12	Gujarat	3502	3502	0	36	6817
13	Haryana	1838	1838	0	1727	737641
14	Himachal Pradesh	48	48	0	41	36184
15	Jammu and Kashmir	795	726	69	618	254749
16	Jharkhand	1541	1541	0	1487	1554596
17	Karnataka	3395	3395	0	3035	1704723
18	Kerala	120	120	0	104	162421
19	Lakshadweep	0	0	0	0	0
20	Madhya Pradesh	2736	2736	0	2439	1355462
21	Maharashtra	4292	4292	0	3988	2212227
22	Manipur	186	186	0	95	48968
23	Meghalaya	39	39	0	12	62381
24	Mizoram	14	14	0	11	4886
25	Nagaland	196	196	0	73	181782
26	Orissa	1877	1875	2	1738	614090
27	Puducherry	42	42	0	34	33428
28	Punjab	1576	1576	0	1355	561948
29	Rajasthan	3883	3879	4	2779	1078613
30	Sikkim	43	43	0	41	18327
31	Tamil Nadu	4445	4445	0	4051	1888419
32	Tripura	419	419	0	414	442872
33	Uttar Pradesh	16270	16269	1	13452	7849863
34	Uttarakhand	226	226	0	202	63161
35	West Bengal	7486	7398	88	7108	3046524
Grand Total		74398	74194	204	62468	31637553

Source: financialservices.gov.in/ banking/FIP DATA 31.03.2012.pdf. Access 14.03.15 12.43

Table-8: Financial Inclusion – Summary progress of all Banks including RRBs, during five years period 2010-2014

Particulars			Year ended 2010	Year ended 2011	Year ended 2012	Year ended 2013	Year ended 2014
Banking outlets in villages	Branches		33378	34811	37471	40837	46126
	Village covered by BCs		34174	80802	141136	221341	337678
	Other modes		142	595	3146	6276	-
	Total		67674	116208	181753	268454	383804
Urban locations through BCs			447	3771	5891	27143	60730
Basic Savings Bank Deposit A/C-Branches		No in millions	60.19	73.13	81.20	100.80	126.00
Basic Savings Bank Deposit A/C-Branches		Amt. In billion	44.33	57.89	109.87	164.69	273.30
Basic Savings Bank Deposit A/C-BCs		No in millions	13.27	31.63	57.30	81.27	116.90
Basic Savings Bank Deposit A/C-BCs		Amt in billion	10.69	18.23	10.54	18.22	39.00
BSBDA Total		No in millions	73	105	139	182
BSBDA Total		Amt. In billions	55	76	120	183
OD facility availed in BSBD account		No in millions	0.18	0.61	2.71	3.92	5.90
OD facility availed in BSBD account		Amt in billion	0.10	0.26	1.08	1.55	16.00
KCC		No in million	24.31	27.11	30.24	33.79	39.90
KCC outstanding		Amt in billion	1240	1600	2068	2623
GCC		No in million	1	2	2.1	4	5.3
GCCs outstanding		Amt in billion	35	35	42	76	-

Source-Table IV.7.RBI Annual Report

Table-9:Progress of Micro-finance Programmes (As at end March2013)

Items	Self Help Groups
	No in million								Amount in billion
	2009-10		2010-11			2011-12		2012-13	2009-10			2010-11		2011-12			2012-13
Loan disbursed by banks	1.5 (0.27)		1.2(0.2)			1.1 (.02)		1.2(0.2)	145(22)			145(22)		165(26)			206(22)
Loan outstanding with banks	4.8 (1.3)		4.8(1.3)			4.4(1.2)		4.5(1.2)	280(63)			312(78)		363(80.5)			996(86)
Savings with banks	6.9 (1.7)		7.5(2.0)			8.0(2.1)		7.3(2.0)	62(13)			70(18)		66(14)			82(18)
Item	Micro finance Institutions
	No in million								Amount in billion
	2009-10	2010-11			2011-12		2012-13		2009-10		2010-11		2011-12			2012-13
Loan disbursed by banks	691	469			465		426		81		76		52			78
Loan outstanding with banks	1513	2176			1960		2042		101		107		113			149
	Joint Liability Groups
Loan disbursed by banks	-			0.09	0.19		0.20		-	7					17			18

Note: Figures in brackets indicate the details about SHGs covered under SJGSY.

Source: Report on Trend and Progress of Banking in India 2012-13

Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on 28 August 2014 and gauging by the 1.5 crore bank accounts that were opened on a single day, signalled accelerated efforts by the government to make financial inclusion a key goal to more inclusive growth. Highlighting the achievements made under PMDJY, the biggest financial inclusion initiative in the world, the finance minister Shri Jaitley told that against the original target of opening bank accounts for 7.5 crore uncovered households in the country by 26 January, 2015, bank have already opened 11.50 crore accounts as on date 17^th January 2015 after conducting survey of 21.02 crore households in the country.(Print release)

X. KEY FINDINGS AND CONCLUSION:

The paper found that the banking industry has shown tremendous growth in volume during the last few decades. In spite of that, still 45% of people living in rural areas remain excluded from the purview of the financial institutions even after 67 years of independence. Therefore, to provide access to these services to them RBI and GoI has taken various initiatives. The target of RBI GoI is to achieve 100% financial inclusion. Many obstacles are there in the path of promoting and achieving financial inclusion. It should not be taken as an obligation by banks and financial institution but should be seen as a future prospect and opportunity for growth. Access to financial services such as savings, insurance and remittances are extremely importance for poverty alleviation and development. In order to achieve the goal of total financial inclusion, policy makers, MFIs, NGOs and regulators have to work together. For building customer awareness E-banking and M-banking training and education programme should be conducted. There should be proper financial inclusion regulation in our country and access to financial services should be made through SHGs and MFIs. Thus financial inclusion is a big road which India needs to travel to make it completely successful. Miles to go before we reach the set goals but the ball is set in motion.

XI. REFERENCES:

1. Rangarajan, C. Report of the committee on financial inclusion, Ministry of Finance, Government of India.2008

2. Chakrabarty, Dr KC. Banking and Beyond: New Challenges before Indian Financial System, RBI Monthly Bulletin, April,2011

3. Leeladhar, V, Taking Banking Services to the Common Man –Financial Inclusion, RBI Bulletin,January:73-77.2006

4. Caskey, D C, Duran, J P, C. R. And Solo, T M.The Urban Unbanked in Mexico and the United State , World Bank Policy research Working Paper 3835.2006

5. Dangi, Nand Kumar, P. Current Situation of Financial Inclusion in India and Its Future Visions, International Journal of Management and Social Science Research(IJMSSR), Vol 2, No.8, August. ISSN: 2319-4421.pp 155-166.2013

6. European Commission .Financial Services Provision and Prevention of Financial Exclusion, Report by the Director General for Employment, Social Affairs and Equal Opportunities, European Commission, 2008.

7. Agarwal A. The Need for Financial Inclusion with an Indian Perspective, Economic Research, (IDBI Gilts Ltd. India), 3 March,2008.

8. NABARD . Annual Reports 2010-12 NABARD, Mumbai.2011

9. NABARD.Status of Microfinance in India 2011-12, NABARD, Mumbai.2012

10. RBI, Report on Trend and Progress of Banking in India 2007-08(Mumbai: Reserve Bank of India). - RBI. Report on Trend and Progress of Banking in India 2008-09 (Mumbai: Reserved Bank of India)-RBI, Report on Trend and Progress of Banking in India 2012-13. Available at http://rbidocs,rbi.org.in/rdocs/publications/PDFs/ORTP21112013_Fpdf.Accessed on 20-11-2013.-RBI, Financial Stability Report (Including Trend and Progress of Banking in India 2013-14).Available at http://www.rbi.org.in. Accessed on 20-03-2015.- RBI , Basic Statistical Returns, March 2010

11. Telecom Regulatory Authority of India (TRAI). The Indian Telecom Services Performance Indicators, January-March 2011, New Delhi.

12. Pratiyogita Darpan Genaral Studies(Indian economy) 2014, p 177

13. Press Information Bureau, Ministry of Finance, Government of India, 2015. available at http://pib.nic.in/newsite/PrintRelease.aspx?relid=114810. Access on 14.03.2015.

14. PMJDY: A National Mission on Financial Inclusion, Department of Financial Services, Ministry of Finance, GoI. www.financialservices,govt,in. Access on 20.02.2015.

15. Financial Inclusion. Department of Financial Services, Quarterly Journal, Ministry of Finance, GoI. Pp 4-7

16. Print release, Press Information Bureau, GoI, Ministry of Finance, 20January 2015. Available at http://pib.nic.in/newsit/PrintRelease.aspx?relid=114810

17. Roy S. K. Financial Inclusion in India: An Overview, TRANS Asian Journal of Multidimensional Research, Vol 1, Issue 5,October. 2012. ISSN 2278-4853.pp. 134-141. Access on 12.03.15(http://www.tarj.in)

18. Srikanth, R. A Study on financial Inclusion- Role of Indian Banks in reaching Out to the Unbanked and Backward areas, International Journal of Applied Research and Studies (iJARS), September,2013. viewed on 26 December2014 (www.ijars.in Manuscript Id: iJARS/630)

19. Singh, B. Financial Inclusion- Role of banking Industry: The Management Accountant. Pp 25-29. January 2012

WEBSITES

1. www.nabard.org

2. www.rbidocs.rbi.org.in

3. www.irjcjournals.org

4. http://www.tarj.in.

5. http://financialservices.gov.in

Received on 09.04.2015

Modified on 12.05.2015

Accepted on 20.05.2015

Research J. Humanities and Social Sciences. 6(2): April-June, 2015, 127-137

DOI: 10.5958/2321-5828.2015.00018.2

	As per Census 2001			As per Census 2011
Households	Total no. of households	No. of households availing banking services	Pc.	Total no. of households	No. of households availing banking services	Pc.
Rural	138,271,559	41,639,949	30.1	167,826,730	91,369,805	54.4
Urban	53,692,376	26,590,693	49.5	78,865,937	53,444,983	67.8
Total	191,963,935	68,230,642	35.5	246,692,667	144,814,788	58.7