- Financial inclusion
Financial Inclusion is the delivery of banking services at affordable costs to vast sections of disadvantaged and low income groups. Unrestrained access to public goods and services is the sine qua non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services to the entire population without discrimination is the prime objective of public policy. The term
Financial Inclusion has gained importance since the early 2000s, and is a result of findings aboutFinancial Exclusion and its direct correlation to poverty. Financial Inclusion is now a common objective for many central banks among the developing nations.Financial Inclusion Taskforce, UK
The United Kingdom was one of the first countries to realize the importance of
Financial Inclusion . It published it's strategy of financial inclusion in it's report "Promoting Financial Inclusion" which was published alongside the Pre-Budget Report of 2004. The UK government also setup the Financial Inclusion Fund of £120m to help bring about Financial Inclusion. The Financial Inclusion Taskforce was formally launched on 21st February 2005 to monitor progress on Financial Inclusion and to make suitable recommendations.Financial Inclusion in India
The
Reserve Bank of India setup a commission (Khan Commission) in 2004 to look into Financial Inclusion and the recommendations of the commission were incorporated into the Mid-term review of the policy (2005-06). In the report RBI exhorted the banks with a view of achieving greater Financial Inclusion to make available a basic "no-frills" banking account. In addition to this KYC (Know your Customer) norms were relaxed for people intending to open accounts with annual deposits of less than Rs. 50, 000. General Credit Cards (GCC) were issued to the poor and the disadvantaged with a view to help them access easy credit. 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 likePuducherry ,Himachal Pradesh andKerala have announced 100% financial inclusion in all their districts. However, illiteracy and the low income savings and lack of bank branches in rural areas continue to be a road block to financial inclusion in many states.See also
*
Financial Exclusion
*Bank of England
*Reserve Bank of India External links
* [http://www.financialinclusion-taskforce.org.uk Financial Inclusion Taskforce, UK]
* [http://www.rbi.org.in Reserve Bank of India]
* [http://bluebook.uncdf.org UNCDF report on Financial Inclusion]
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