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Financial inclusion in India: a road map towards future growth

Financial inclusion in India: a road map towards future growth
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In this paper, the researcher attempts to understand financial inclusion and its importance for overall development of society and Nation’s economy.

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  1. INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)

    ISSN 0976-6502 (Print)
    ISSN 0976-6510 (Online)
    IJM
    Volume 7, Issue 2, February (2016), pp. 298-306
    http://www.iaeme.com/ijm/index.asp ©IAEME
    Journal Impact Factor (2016): 8.1920 (Calculated by GISI)
    www.jifactor.com

    FINANCIAL INCLUSION IN INDIA: A ROAD MAP TOWARDS FUTURE
    GROWTH

    CMA Dr. M. Sheik Mohamed
    Vice Principal (SF) and Head, PG Department of Commerce (SF)
    Jamal Mohamed College, Tiruchirappalli-620 020

    G. Reka
    Assistant professor, Department of Commerce,
    Jamal Mohamed College, Tiruchirappalli-620 020

    ABSTRACT
    Financial inclusion is an innovative concept which makes alternative techniques to
    promote the banking habits of the people. However for attaining the objectives of inclusive
    growth there is a need for resources, and for resource generation and mobilization financial
    inclusion is required. It plays a very crucial role in the process of economic growth. Financial
    inclusion stands for delivery of appropriate financial services at an affordable cost, on timely
    basis to vulnerable groups such as low income groups and weaker section who lack access to
    even the most basic banking services. In this paper, the researcher attempts to understand
    financial inclusion and its importance for overall development of society and Nation’s
    economy. This study focuses on approaches adopted by various Indian banks towards
    achieving the ultimate goal of financial inclusion for inclusive growth in India and analyses of
    past years progress and achievements.
    Key words: Financial Inclusion; Financial Exclusion, Financial Services, Financial Viability;
    Profitability, Financial Condition.

    Cite this Article: Cma Dr. M. Sheik Mohamed and G. Reka. Financial Inclusion in India: A
    Road Map towards Future Growth. International Journal of Management, 7(2), 2016, pp. 298-
    306.
    http://www.iaeme.com/ijm/index.asp

    1. INTRODUCTION
    Financial inclusion is now a common objective for numerous central banks. The banking sector takes a
    lead role in promoting financial inclusion. With the arrival of banking technology and realization that
    poor are bankable with good business prospects, financial inclusion initiatives will strengthen financial
    deepening further and provide resources to the banks to expand credit delivery. The banking
    technology initiatives meant for financial inclusion should be collaborative and innovative with an
    objective to reduce the transaction costs. Thus, financial inclusion along with the Governmental
    developmental programmes will lead to an overall financial and economic development in our country

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    Cma Dr. M. Sheik Mohamed and G. Reka, “Financial Inclusion in India: A Road Map Towards Future
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  2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
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    and as in the case for most developing countries, extending the banking services to everyone in the
    country will be the key driver towards an inclusive growth.

    2. LITERATURE REVIEW
    (Massey, 2010) said that, role of financial institutions in a developing country is crucial in promoting
    financial inclusion. The efforts of the government to promote financial inclusion and deepening can be
    further improved by the pro-activeness on the part of capital market players including financial
    institutions. Financial institutions have a very crucial and a wider role to play in development of
    financial inclusion.
    (Roy, 2012) studied the overview of financial inclusion in India. The study concluded that banks have
    set up their branches in the remote corner of the country. Rules and regulations have been simplified.
    The study also said that banking industry has shown tremendous growth in volume during last few
    decades.
    (V.Ganeshkumar, 2013) noted that branch density in a state measures the opportunity for financial
    inclusion in India. Literacy is a prerequisite for creating investment awareness, and hence intuitively it
    seems to be a key tool for financial inclusion. But the above observations imply that literacy alone
    cannot guarantee high level financial inclusion in a state. Branch density has significant impact on
    financial inclusion. It is not possible to achieve financial inclusion only by creating investment
    awareness, without significantly improving the in- vestment opportunities in an India.
    JDY Mission Document (2014), In the year 2014, our Hon’ble PM launched the Pradhan Mantri Jan
    Dhan Yojana in which his sole motive was to bring 100% financial inclusion in India. This yojana has
    been divided into two phases for its implementation. The first phase will range from 15th August, 14 to
    14th August, 15 in which universal access to banking facilities, providing basic banking accounts for
    saving & remittance, Rupay debit card with inbuilt accidental insurance of Rs 1 Lakh and training on
    financial literacy will be will be provided. The second phase will range from 15th August, 15 2015 to
    15th August 2018 in which an overdraft facility of up to Rs 5000/- after six months of satisfactory
    performance of saving / credit history, creation of Credit Guarantee Fund for coverage of defaults in
    overdraft A/Cs, Micro-Insurance, Unorganized sector pension schemes like Swavalamban etc will be
    taken care of.
    PM dedicates Digital Village (2015) Prime Minister Shri Narendra Modi dedicated the „ICICI Digital
    Village to the nation at an event which was organized to celebrate the ICICI Group’s 60 years of
    partnering India in its progress. ICICI Bank announced that it created the „ICICI Digital Village at
    Akodara in Sabarkantha district of Gujarat to enable villagers to use technology in various aspects of
    life including banking, payments, education and healthcare among others. Here, financial transactions
    are cashless, text books are paperless, children can read books on LED monitors and Tabs, patients can
    avail the facility of telemedicine and wi-fi connectivity is available across the village for access to the
    villages’ own website.

    3. OBJECTIVE OF STUDY
     To understand the financial exclusion and financial inclusion.
     To analyse the current status of financial inclusion in Indian economy.
     To highlight the need of financial inclusion towards the economic growth of a nation.
     To study the major initiatives and policy measures taken by RBI and GoI for financial
    inclusion.
     To suggest the future prospects of financial inclusion

    4. CONCEPT OF FINANCIAL EXCLUSION
    Before understand financial inclusion we should have knowledge about financial exclusion. The word
    of financial exclusion first time used in 1993 by Leyshon and thrift who were concerned about limited
    access on banking services as a result number of bank branches were closed. In1999, kempson and
    whyley defined financial exclusion in border sense which refers to those people who have excluded
    access to mainstream financial services and product till date numbers of analysts added their views to
    define financial exclusion.

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    In India, The Report of the financial inclusion in January 2008 by C Rangarajan, Financial
    exclusion is defined as restricted access to financial services to certain segment of the society.
    Generally, this large section of the population comprises individuals or family falling into low income
    groups, which are not able to access even the most basic banking services like bank accounts, credit,
    insurance, financial advisory services and payment services. So basically, financial exclusion is the
    situation where certain group of population is excluded or unable to access low cost an appropriate
    mainstream financial products and services.

    5. CONCEPT OF FINANCIAL INCLUSION
    Financial inclusion is one of the most important aspects in the present scenario for inclusive growth
    and development of economies. The financial inclusion term was first time used by British lexicon
    when it was found that nearly 7.5 million persons did not have a bank account. But financial inclusion
    concept is not a new one in Indian economy. Bank Nationalisation in 1969, establishment of RRBs and
    introduction of SHG- bank linkage programs were initiatives taken by RBI to provide financial
    accessibility to the unbanked groups Financial inclusion does not stand for delivery of financial
    services for all at all cost. But it means that the delivery of financial services and products at affordable
    costs of excluded sections of population and low income groups. It plays a crucial role to remove away
    the poverty from the country. Financial inclusion is to provide equal opportunities to vast sections of
    population to access mainstream financial services for better life, living and better income. It provides
    path for inclusive growth. Financial inclusion can be described as the provision of affordable financial
    services, viz saving, credit, insurance services, access to payments and remittance facilities by the
    formal financial systems to those who are excluded. So, financial inclusion refers to access to vast
    range of financial product and services at affordable cost. It not only includes banking products but also
    other financial services such as loan, equity and insurance products.

    6. DEFINITIONS OF FINANCIAL INCLUSION
    According to the Planning Commission (2009), Financial inclusion refers to universal access to a
    wide range of financial services at a reasonable cost. These include not only banking products but also
    other financial services such as insurance and equity products.
    According to Chakraborty (2011), Financial inclusion is the process of ensuring access to appropriate
    financial products and services needed by all sections of society including vulnerable groups such as
    weaker sections and low income groups at an affordable cost in a fair and transparent manner by
    mainstream institutional players.

    7. INITIATION OF FINANCIAL INCLUSION CONCEPT IN INDIA
    In India, financial inclusion first featured in 2005, when it was introduced by K C Chakraborthy, the
    chairman of Indian Bank. Mangalam Village became the first village in India where all households
    were provided banking facilities. Norms were relaxed for people intending to open accounts with
    annual deposits of less than Rs. 50,000. General credit cards (GCCs) were issued to the poor and the
    disadvantaged with a view to help them access easy credit. In January 2006, the Reserve Bank
    permitted commercial banks to make use of the services of non-governmental organizations
    (NGOs/SHGs), micro-finance institutions, and other civil society organizations as intermediaries for
    providing financial and banking services. These intermediaries could be used as business facilitators or
    business correspondents by commercial banks.
    The bank asked the commercial banks in different regions to start a 100% financial inclusion
    campaign on a pilot basis. As a result of the campaign states or U.T.s like Pondicherry, Himachal
    Pradesh and Kerala announced 100% financial inclusion in all their districts. Reserve Bank of India’s
    vision for 2020 is to open nearly 600 million new customers’ accounts and service them through a
    variety of channels by leveraging on IT. However, illiteracy and the low income savings and lack of
    bank branches in rural areas continue to be a roadblock to financial inclusion in many states and there
    is inadequate legal and financial structure

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    8. NEED OF FINANCIAL INCLUSION
    According to the United Nations the main goals of inclusive finance are as follows:
     Access at a reasonable cost of all households and enterprises to the range of financial services
    for which they are “bankable,” including savings, short and long-term credit, leasing and
    factoring, mortgages, insurance, pensions, payments, local money transfers and international
    remittances.
     Sound institutions, guided by appropriate internal management systems, industry performance
    standards, and performance monitoring by the market, as well as by sound prudential
    regulation where required
     Financial and institutional sustainability as a means of providing access to financial services
    over time
     Multiple providers of financial services, wherever feasible, so as to bring cost-effective and a
    wide variety of alternatives to customers (which could include any number of combinations of
    sound private, non-profit and public providers).

    9. VARIOUS APPROACHES TO ACHIEVE FINANCIAL INCLUSION
    In India, various measures taken by banks, GOI and RBI for financial inclusion plan.
    Product Based Approach: Reserve bank of India has been proactive, liberal and supportive while
    making policies so as to enable financial institutions to come up with innovative products for enabling
    a common man to get the benefit of the financial inclusion plan. Some products developed for
    fulfillment of this approach have been mentioned in this paper.
    No- Frills Account (NFAs):- This concept was introduced by RBI in November 2005 to provide
    access to basic baking services by financially excluded peoples. Basic banking no-frills account is with
    nil or very low minimum balance as well as charges that make such accounts accessible to vast sections
    of the population. Banks have been advised to provide small overdrafts in such accounts.
    Kisan Credit cards (KCCs):- Under this scheme banks issue smart cards to the farmers for providing
    timely and adequate credit support from single window banking system for their farming needs. During
    2012-13 (up to December 2012), public and private sector banks issued 1.2 million smart cards as
    KCCs.
    General Purpose Credit Cards (GCC) :- In 2005 Reserve bank of India, issue guidelines to banks
    that to provide General Purpose Credit Card (GCC) which facilitate credit up to Rs.25000/- without
    any collateral requirement for rural and semi urban people based on assessment of household cash
    flows. Now as per the revised guidelines in Dec.‟2013 under this approach bank also fulfill Non- farm
    entrepreneurial credit requirement of individuals (e.g. Artisan Credit card, Laghu Udyami Card,
    Swarojgar Credit Card, Weaver‟s Card etc) There will be no ceiling on the loan amount as long as the
    loan is for the purpose of non-farm entrepreneurial activity and is otherwise eligible for classification
    as priority sector. Security norms will be applicable as per Reserve Bank guidelines on collateral free
    lending for micro and small units issued from time to time.
    Saving account with Overdraft facility: – Banks have been advised to provide overdraft (OD) facility
    in saving account and also Small Overdrafts in No-frills accounts. The setting up of the limit for the
    same would be done by banks considering the transaction in the account. This would help the customer
    to get easy access to the credit at lower rates.

    10. BANK LED APPROACH
    Self Help Group – Bank Led Initiative (SLBP):- The SLBP or Self Help Group – Bank Linkage
    Program has been the major institutional based innovation in India for enabling access and covering the
    gap of reaching financially excluded population of the country in the last two decades. In this model,
    the banks involve themselves with a group of local people with the idea of enabling them to pool up
    their savings. The same is deposited with the bank against which the bank also provides a certain
    amount of credit facility. The group takes a decision to whether to lend to any member of the group.
    The bank provides the framework, accounting services and support to the group to manage their
    deposits and lending. Thus the model has an approach of savings first, lending later. The banks do not

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    have a risk in such lending as the borrower’s reputation and peer pressure in the group would reduce
    the risk of bad loans considerably.
    Business Facilitators (BFs)/Business Correspondents (BCs):- The BC/BF model is a model which
    based on information and communication technology (ICT). In this model the intermediaries or
    BC/BFs are technologically empowered by the banks to provide the last mile delivery of financial
    products and services. Initially created by the banks themselves and later with improvisations and RBI
    policy support, the model on the back of innovative technologies is bridging the connectivity gap
    between the service seekers, i.e., under-served public, and the service providers, i.e., the banks.

    11. REGULATORY APPROACH
    Simplified KYC Norms: – Under current KYC norms, a customer has to provide number of
    documents for opening an account as per RBI guidelines. However, the people living in rural areas face
    problem in fulfilling these norms. To enable banks to tap in this huge opportunity of rural banking in
    unbanked areas and to meet the objective of financial inclusion, RBI has relaxed a number of norms for
    accounts opened by people who plan to keep balances not exceeding Rs.50, 000 and whose total credit
    in all the accounts taken together is not expected to exceed Rs.100, 000 in a year. Small accounts can
    now be opened on the basis of an introduction from another account holder who has satisfied all the
    KYC norms.
    Simplified bank saving account opening: – The account opening form has been simplified to ease the
    opening of account by the poorer sections, street hawkers and other migratory labours of the society.
    iii. Bank branch authorization: – RBI has permitted banks to open branches without taking
    authorization, thus deviating from its normal norms, in tier 3 to 6 city, towns, or villages. This would
    enable the government, regulator and the banks to speed up the drive for financial inclusion and this
    make available the financial services to the unbanked population of the country.

    12. TECHNOLOGY BASED APPROACH
    Mobile Banking :- One of the most remarkable developments in terms of innovation in order to
    harness the full power of technology, the banks have tied up with mobile operators to provide financial
    services like bill and utility payment, fund transfer, ticket booking, shopping etc. Some examples of
    this model are m-Pesa by Vodafone and Airtel Money.
    Kiosk / ATM based banking: – In some states, the state government has taken initiatives for providing
    kiosk based model for access to financial services. Also banks have used the technology to enable their
    ATMs to virtually act like a 24×7 branches.
    Branchless Banking: – Some of the leading banks have come up with this concept where there would
    be an online system with chat facility assisting the person to make use of various electronic machines
    for depositing and withdrawing cash and cheques. However this initiative is in a very initial stage and
    has a limitation in terms of initial Cost for banks and literacy / knowledge for the rural population and
    hence this concept is currently limited to urban and semi-urban areas.
    Aadhaar Enabled payment services:- In this system, any Indian citizen having an Aadhaar number
    updates his account with the same. All accounts having aadhaar number updated are to be reported to
    RBI, which in turn reports it to various government departments. While making payments to people for
    working under initiatives like MGNREGA or various subsidy schemes, the departments use this
    information for directly crediting the money to the beneficiary‟s account. This not only reduces the
    delay in the benefits being received by the end user, but also reduces the chances of corruption in the
    distribution of the benefits under schemes. Also the unique biometric identification data stored in the
    Aadhaar database is expected to empower a bank customer to use Aadhaar as his/her identity to access
    various financial services. A pilot scheme in four districts of Jharkhand state is currently being carried
    out under which MGNREGA wages to labourers are credited to their Aadhaar enabled bank accounts.

    13. KNOWLEDGE BASED APPROACHES
    Financial education, financial inclusion and financial stability are three elements of an integral strategy
    to empower people to make effective use of the financial services network. While financial inclusion
    works from supply side, financial education feeds the demand side by promoting awareness among the
    people regarding the needs and benefits of financial services offered by banks and other institutions.
    These two strategies together promote greater financial stability.

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    Financial Stability Development Council (FSDC) has explicit mandate to focus on financial
    inclusion and financial literacy simultaneously.
    RBI had issued guidelines on the financial literacy Centres (FLC) on in June 2012 for setting up
    FLCs. It was advised that the rural branches of scheduled commercial banks should increase efforts
    through conduct of outdoor Financial Literacy Camps at least once a month. Accordingly, 718 FLCs
    had been set up as at end of March 2013. A total of 2.2 million people had been educated through
    awareness camps / choupals, seminars and lectures during April 2012 to March 2013.

    14. GOVERNMENTS INITIATIVES
    The government has taken various initiatives indirectly through the regulators, government promoted
    schemes through its various ministries. Some such initiatives have been listed below.
    Induction of SHG-2:- The original SHG as initialized by NABARD had certain limitations. This led
    to NABARD preparing a strategy to revitalize the SHG movement leading with the induction of SHG-2
    model.
    Women SHGs Development Fund:- The Union Budget 2011-2012 proposed a “Women’s SHG’s
    Development Fund” with a corpus of Rs. 500 crore. The GoI created this fund to empower women and
    promote their SHGs. The responsibility of managing the fund is of NABARD. It managed the same
    through two of its major microfinance funds, namely Financial Inclusion Fund (FIF) and the Financial
    Inclusion Technology Fund (FITF).
    Swarnjayanti Gram Swarozgar Yojana (SGSY):- It is a centrally sponsored scheme that follows the
    mechanism of forming SHGs of rural poor households, providing capacity building training and linking
    groups to banks. SGSY is primarily designed to promote self-employment oriented income generating
    activities for the Below Poverty Level (BPL) households in rural areas.
    National Rural Livelihood Mission (NRLM):- Established in June 2010 by the Ministry of Rural
    Development (MoRD), GoI. It is based on the success of Indira Kranti Patham (IKP), a poverty
    alleviation program being implemented in Andhra Pradesh. The key strategies of NRLM are to a.
    Implement the program with greater emphasis on federations of SHGs b. Provide flexibilities to states
    for designing specific action plans for poverty alleviation, c. Introduce interest subsidy for
    encouraging repayments of loans and provide multiple doses of credit d. Improve training and capacity
    building efforts by setting up skill training institutes in each district e. Facilitate market linkages and f.
    Improve monitoring and evaluation process.
    The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS):- This
    scheme aims to enhance the livelihood of the rural people by guaranteeing at least one hundred days of
    wage employment in a financial year to a rural household whose adult members volunteer to do
    unskilled manual work. As the payments are made through the bank/post office accounts, in 2010-11,
    nearly 10 crore bank/post office accounts have been opened.
    Aadhaar- Unique Identification Authority of India (UIDAI):- The GoI has embarked an initiative to
    provide an individual identification number to every citizen of India and in 2009; it established the
    UIDAI to issue these cards on behalf of the GoI. This number provided by UIDAI will serve as a proof
    of identity and address, anywhere in India. The Aadhaar number will also enable people to have access
    to services such as banking, mobile phone connections and other government and non- government
    services in due course. In addition, the UIDAI has introduced a system in which the unbanked
    population will be able to open an account during enrollment with Aadhaar without going to a bank.
    The individual will be able to access such bank accounts through a micro-ATM network with large
    geographic reach.

    15. BENEFITS OF FINANCIAL INCLUSION
     At the micro level: For individuals, formal financial institutions provide opportunities to
    better manage and increase savings. Individuals can also borrow to meet emergency cash
    needs, such as for hospital visits and funerals, lump-sum expenses such as weddings or
    funerals or to accumulate assets, such as a bicycle or a cart. Borrowers can also use a loan to
    fund education or health needs, such as school or medical fees. All these things can make
    people more productive and happier, boosting the economy as well as the standard of living.
    There are similar benefits for small entrepreneurs and firms. Loans from financial institutions

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    allow them to overcome cash constraints to set up and pursue new businesses. These loans not
    only provide the funds for working capital needs but also for business expansion. Formal
    financial institutions also lower the reliance of individuals and firms on moneylenders and
    other sources of credit in the informal sector that often charge very high rates of interest and
    can have unreasonable collateral requirements.
     At the macro level: It helps mobilize savings that would otherwise be sitting idle and allows
    them to be invested in more productive areas, improving economic growth potential. At the
    same time, improvements in labour skills through better education and health care, as well as
    the set-up of new businesses raise economic productive potential. Lower interest rates charged
    in the formal sector also improve the sustainability of an individual or firm’s financial
    condition. A report looking at the full impact of financial inclusion on economic growth
    potential, estimates that a 10ppt increase in financial inclusion (measured as an account with a
    formal financial institution as defined in the Global Findex Survey) could raise income per
    worker by 1.3% on average, with increases in financial inclusion resulting in improvements in
    total factor productivity and capital per worker.
     Reducing inequality- Several experiments suggest that the impact on poverty reduction is
    significant but varies depending upon the type of instrument used (World Bank, 2014).
    Individuals have seen a significant improvement in consumption, savings and productive
    investment through access to basic accounts with financial institutions. Insurance also appears
    to have a positive impact on growth and poverty reduction through more productive
    investment in better seeds and more expensive tools, for example. India’s recently announced
    Jan Dhan Yojana promises to pay benefits directly into bank accounts. The government
    scheme will also provide overdraft facilities and debit cards to those who sign up. It is
    expected to help improve fiscal policy through lower leakage of benefits such as grain, fuel
    and fertilizer subsidies. This could reduce India’s subsidy bill, which is now close to 2% of
    GDP. Reserve Bank of India (RBI) Governor Raghuram Rajan expects the “link between poor
    public service, patronage and corruption” to be broken through financial inclusion

    16. CHALLENGES TO INCREASING FINANCIAL INCLUSION
    While the reasons for lack of financial inclusion vary between countries and regions, a number of
    common themes emerge. Broadly there are five main barriers to financial inclusion, they are as
    follows:
     Natural barriers- A number of ‘natural’ barriers to financial inclusion often prevent poor
    people from accessing even the most basic formal financial services. Simply being too poor or
    the geographic distance to a bank can be a huge deterrent for a poor person. According to a
    study, globally 25% of ‘unbanked’ adults cited costs (this rises to 31% in SSA), 20% reported
    that the bank is too far away while 13% reported lack of trust in the bank. Transaction costs,
    both for banks and poor people, are another major barrier to financial inclusion.
     Lack of financial infrastructure- Lack of financial infrastructure is the second major barrier
    to financial inclusion. Governments have a key role to play by facilitating banks’ access to
    borrower information. This can be achieved either by passing laws and regulations that enable
    banks to share information or by directly setting up public credit registries. Public credit
    registries are databases established and managed by central banks that capture information on
    both individual and commercial borrowers and their credit status. Public registries can be
    important in the early stages of financial development, but they can reduce the attractiveness
    of private bureaus. Private credit bureaus refer to information-sharing arrangements
    maintained by private financial institutions.
     Restrictive regulations- Restrictive regulations are the third barrier to formal financial
    inclusion for the poor. The Global Findex data highlights that 18% of adults in the developing
    world cite ‘lack of necessary documentation’ as the reason for not having a formal account.
    Stringent KYC documentation requirements imposed by national regulators on banks in order
    to comply with guidelines around the prevention of money laundering and combating the
    financing of terrorism can block poor households from entering the financial system.
    According to a study, globally, each additional document required to open an account reduces

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    the number of accounts by 153 per 1,000. More often than not, poor people do not have any
    form of formal identity documentation.
     Governance failures -Weak public-sector institutions that exemplify governance failure can
    be detrimental to financial inclusion. Improvements in public-sector governance can have a
    positive impact on the equitable use of and access to financial services. This applies both to
    banks’ direct relationships with individuals and to any joint ventures they might make with
    correspondents, microfinance institutions or mobile providers.
     Lack of suitable products- The final challenge to financial inclusion is creating attractive
    financial products. Financial products need to be tailored to meet the needs of the poor.
    Products need to be affordable, available within reasonable physical proximity and regulated
    to protect consumers. Banks may need to adopt a different approach towards the poorer
    segments of society. Although banks have some products that are suitable for addressing the
    needs of the poor, quite often the poor either have limited knowledge or an incorrect
    understanding of the products and are reluctant to use them.

    17. CONCLUSION
    Even though enough efforts are being made by all stake holders viz Regulator, Government, Financial
    Institutions and others, the efforts are not yielding the kind of result expected. For achieving complete
    financial inclusion and for inclusive growth, the RBI, Government, NABARD and the implementing
    agencies will have to put their minds and hearts together so that the financial inclusion can be taken
    forward. 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!

    18. RECOMMENDATIONS
     The government of India , RBI and commercial banks should plan a coordinated campaign in
    partnership with the trainers and professional to educate customers about the basic financial
    products, services
     Promote the practice of agency banking micro finance institutions & business correspondents
    so that they can reach the excluded people and make them understand the importance of
    getting involved in the formal banking system and using the financial products.
     Such policies should be implemented in which financial institutions strive for achieving
    synergies with the technology providers so that they can reach the population at large and
    cover as many deprived people as possible and also handle low value, large volume
    transactions efficiently and effectively.
     Relaxations being provided on the requirements of individual identity proofs for opening bank
    accounts should be strictly adhered to by the financial institutes for these act as major
    stumbling blocks and thus restrict the under-privileged to have access to formal financial
    channels.
     Any government or social security payments or payments under all the government schemes
    should be strictly routed through the service area bank account. This will make people in rural
    areas to compulsorily have an account in their service area branch to avail the government
    benefit.

    305
    Cma Dr. M. Sheik Mohamed and G. Reka, “Financial Inclusion in India: A Road Map Towards Future
    Growth” – (ICAM 2016)

  9. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
    6510(Online), Volume 7, Issue 2, February (2016), pp. 298-306 © IAEME Publication

    REFERENCE

    [1] Shivangi bhatia1, dr. Seema singh(2015),financial inclusion – a path to sustainable
    growth .
    [2] Sonu Garg, Dr. Parul Agarwal,(2014), Financial Inclusion in India – a Review of
    Initiatives and Achievements .
    [3] Neha Dangi, Kurukshetra Pawan Kumar,(2013), Current Situation of Financial Inclusion
    in India and Its Future Visions
    [4] Ms Apurva A. Chauhan (2013), A Study on Overview of Financial Inclusion in India.
    [5] Dr. Anupama Sharma, Ms. Sumita Kukreja (2013) An Analytical Study:Relevance of
    Financial Inclusion For Developing Nations.
    [6] www.businesstoday.in
    [7] www.allbankingsolutions.com
    [8] www.business-standard.com
    [9] www.iibf.org.in
    [10] www.indiamicrofinance.com

    306
    Cma Dr. M. Sheik Mohamed and G. Reka, “Financial Inclusion in India: A Road Map Towards Future
    Growth” – (ICAM 2016)

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