A study of financial inclusion in south Gujarat region
Rangarajan's committee on financial inclusion defines it as:
"Financial inclusion may be defined as the process of access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost."
Indian Institute of Banking & Finance (IIBF) opines, “Financial inclusion is delivery of banking services at an affordable cost (‘no frills’ accounts,) to the vast sections of disadvantaged and low income group. Unrestrained access to public ...view middle of the document...
Hence the major task before banks is to bring most of those excluded, i.e. 75% of the rural households, under banking fold. There is a need for the formal financial system to look at increasing financial know how and financial counselling to focus on financial inclusion and distress amongst farmers. Banks should conduct full day programs for their clientele including farmers for counselling small borrowers for making aware on the implications of the loan, how interest is calculated, and so on, so that they are totally aware of its features. This enables the customer to remit funds at low cost Access to appropriate financial services can significantly improve the day-to-day management of finances. For example, bills for daily utilities (municipality, water, electricity, telephone) can be more easily paid by using cheques or through internet banking, rather than standing in the queue in the offices of the service.
Financial inclusion also includes:
I. Nationalization of private sector banks,
II. Introduction of priority sector lending norms,
III. The Lead Bank Scheme,
IV. Branch licensing norms with focus on rural/semi-urban branches,
V. Interest rate ceilings for credit to the weaker sections and
VI. Creation of specialized financial institutions to cater to the requirement of the agriculture and the rural sectors having bulk of the poor population.
