Financial Inclusion in India: Select Issues

This paper provides recommendations for utilizing and developing existing resources such as mobile phones, banking technologies, post offices, fair price shops, and business correspondents (BCs) in order to further financial inclusion in India. It states that financial inclusion enables improved and better sustainable economic and social development by empowering the underprivileged and the poor to take well-informed and better financial decisions. Key recommendations provided include:

• There is a need to have granular schemes, preferably different schemes for rural and urban areas;
• Methods of financial literacy need to be changed from distributing printed literature to audio and visual media;
• Financial literacy needs to be given importance in schools, and student small saving programs, where bankers visit schools and collect small deposits, need to be revived;
• BCs need to be rebranded as a banker against the existing image of a travelling salesman to enhance the acceptability of BCs among general public;
• Banks can tie-up with India Post to utilize their extensive network by setting up small banking counters at each of their post offices;
• Banks should educate their staff and BCs about latest developments in mobile banking, and mandate them to promote these facilities during financial literacy campaigns in rural areas.