Achieving the goal of financial inclusion is now more possible than ever before.
India is one of the fastest growing large economies in the world today, expected to grow at around 7.5% in the year to come. But as important as it is for a country the size of India to grow fast, it is equally important that growth benefits everyone in the economy and does not remain restricted to a few urban pockets.
In other words, growth needs to be inclusive as well. Inclusive growth ensures the availability of basic services to everyone across a spectrum of human requirements. Not the least of these is financial inclusion. Even though the banking sector grew by 14% during 2013-14 and there are 157 domestic banks operating in the country today, as of August 2015, only 40% of adults had formal bank accounts.
However, achieving the goal of financial inclusion is now more possible than ever before. For one, the penetration of mobile phones in the far reaches of the country has ensured vast accessibility of banking services to otherwise remote areas. The advent of the Fintech sector is also impacting the banking sector by creating newer, faster and simpler solutions, allowing for greater accessibility by customers. The emergence of new banking structures like small finance banks, for which 10 licenses have recently been sanctioned by the RBI as well upcoming payment banks will further encourage financial inclusion.
Last, but not the least, government policies like Pradhan Mantri Jan Dhan Yojana (PMJDY) and Pradhan Mantri Mudra Yojana (PMMY) are further aimed at bringing the vast unbanked and underserved population of the country under the ambit of formal banking and financial services. Barely one year since its inception, have official records showed collections of over Rs. 25,000 crore in small deposits under the PMJDY, with a steady decline in zero balance accounts. PMMY on its part hopes to provide access to credit to small entrepreneurs, who otherwise have to take recourse to informal channels. Policy changes in the operations of Public Sector Banks (PSBs) are also underway, particularly, in the appointment and responsibilities of key personnel, to allow them greater competitiveness.
The Economic Times, India’s leading financial daily, has brought to you for decades, the development of India’s economy and business. With its deep understanding of the drivers of India’s policy making and business environment, the Economic Times now brings to you the ET conference – ‘Inclusive Opportunities: Deepening the reach of India’s financial services’.