Financial Inclusion

Financial Inclusion refers to connecting each and very citizen of the country with the banking system. For over all development of the country financial sector should remain strong and financial sector of a country may become strong only if each and every individual is connected to the banking system. According to National Survey Sample Organisation it has been found that out of total farmland only 49% have access to credit, in this 49% only 12% have access to institutionalized credit the remaining 37% is dependent upon the money lenders. Financial inclusion therefore becomes important in a country like India.

It is necessary because it will ensure access to institutionalized banking which may develop a habit of saving, to ensure social security, to educe dependency on money lenders and to provide face to face free of cost financial consultancy. Kerela , is the first state in country where every household has atleast one bank account. It is not something new in India, just after independence the government and India starting adopting measures to achieve this goal. However, the process has gained momentum recently with the introduction of the government scheme like Pradhan Mantri Jan Dhan Yojana. 

Looking back, after independence India started the Process of nationalization of bank in 1969 and concept of lead bank was introduced in the same year in which the bank having maximum number of branches in a district have to adopt that district for financial inclusion. For same purpose, in 1992 NABARD was setup to provide loans to the banks and financial institution which further provided loans for agricultural and rural development. Kisan credit card in another tool through which farmers can get loans at a lower rate of interest from the institutionalized agencies. Introduction of MUDRA yojana , payment banks, priority sector lending, micro finance institutions, etc are the steps taken by the government to provide people with people with more credit facility from authorized institutions.