A Road Map to Financial Inclusion in India

Abstract

Financial inclusion is emerging as a new paradigm of economic growth that plays a major role in driving away poverty from the country. It refers to the delivery of banking services to masses including privileged and rural peoples at affordable terms and conditions. Financial inclusion is an important priority of the country in terms of the economic growth of society. It enables the reduction of the gap between the rich and poor populations. In the current scenario, financial institutions are the robust pillars of progress, economic growth and development of the economy. The term is related to increasing the spread of financial services to those who are not aware of or who are not in a position to avail of financial services due to remote areas or lack of technology, etc. A few problems are coming in the path of financial inclusion but it is sure that if some corrective measures are adopted by the authorities, then financial inclusion can be achieved in India to the fullest. Modern Information and communication technology (ICT) can act as a tool to develop a platform that helps us to extend financial services in remote areas. Technology intervention helps banks to reduce their cost, to increase customer reachability and better management of business risk. Improved access to formal financial services boosts economic development, decreases inequality, and benefits people at the bottom of the pyramid, more specifically small and marginal farmers, micro and small enterprises, women, and other excluded segments of the population. The digital disruptions and emergence of innovative business models in the banking and financial sector are enabling factors for the deepening of digital financial inclusion (DFI). The governments, central bank, commercial banks, fintech companies, and other private and public enterprises are contributing to the Digital Financial Services (DFS) ecosystem through innovative payment infrastructure, low-cost digital products and services, unique delivery models, regulation, and so on. In this article, the theoretical aspects of financial inclusion, modes to achieve financial inclusion by creating financial literacy among the public and digitization of financial inclusion are being dealt with.