FINANCIAL INCLUSION IN RURAL SECTOR BANKING

Mr. Nelson Marwin FernandesLecturer

PG Department of Commerce

SVS College Bantwal

INTRODUCTION:

Financial Inclusion is important for improving the living conditions of poor farmers, artisans and rural nonfarm enterprises.

Financial Exclusion, in terms of lack of access to credit from formal institutions, is high for small and marginal farmers. Apart from formal banking channels, the role of MFIs, NABARD, Self Help Group movement is important to improve Financial Inclusion. Banks need to take bold decisions and reach out to rural India with strategies and Business models which are beyond the realm of conventional thinking.

shared Infrastructure and build collaborative business models to serve in Rural India

OBJECTIVES OF THE STUDYThe purpose of the study is to evaluate the

need of Financial Inclusion in India. In order to achieve this objective the following issues have been examined:

1. To study the concept of Financial Inclusion and find the level of its compliance with the RBI guidelines.

2. To evaluate the role of different Financial Institutions towards Financial Inclusion.

3. To identify suitable methods for financial inclusion in rural areas.

NEED FOR FINANCIAL INCLUSIONFinancial Inclusion means providing

financial services to all sectors of the society which includes the underprivileged, the poor and the disadvantaged people.

Due to absence of proper banking avenues, people in rural India are not able to channelize their savings. Through Financial Inclusion saving habit can be developed by educating people to utilize their funds in various Financial Instruments rather than investing in building, lands and bullion etc.

MEASURES TAKEN BY GOI,RBI & NABARDCustomer Service CentersCenters Credit Counseling CentersAadhar SchemeThe National Agricultural Insurance SchemeNo frill AccountKnow Your Customer General Credit CardProject on Processor Cards Micro Finance Development FundRole of NGOs, SHGs and MFIsMicro Pension ModelNationwide Electronic Financial Inclusion System

Challenges Of Financial InclusionMajor constraint in achieving Financial Inclusion

in India is lack of technology i.e Non-functional hand-held device, unavailability of power, network and limited number of technology service providers to cover the unbanked villages.

Some of the policy changes to improve financial inclusion were hurriedly executed without setting up an appropriate regulatory authority and proper consumer education. RBI launched“National strategy for financial Education” on July 16, 2012 with a vision to build “A financially empowered India” with the goals to create awareness and educate consumers on access to financial services,

SUGGESTIONSIntroduction of mobile banking facility in unbanked

rural areas.Commercial/Co-operatives societies in association

with govt research dept should make the a study of the financial requirements of the rural farmers and based on the report banks should come forward for advancing loans.

Loan recovery measures should be taken based on the economic conditions prevailing in the region.

During the period of financial crisis due to natural calamities loan advancers may go for a waiving a portion of loan advanced in support of the poor farmer.

Preference should be given to local people in posting the office personnel to the rural branches in order to get in touch with the rural mass.

Revision of the schemes like pigmi needs to be introduced to influence the people, especially small income people, to visit the banks frequently so that their saving habit will develop.

CONCLUSIONServices of financial institution has become necessity of the modern economy. Stress is to be given for the financial inclusions of all sections of the society. In order to make the govt. assistance to reach the concerned, financial inclusions can be taken as tool. Experience speaks that a considerable portion of rural population is not connected to the streams of banking services. Hence necessary steps are to be taken urgently to do the need full . Doing the requirement will find economic growth with healthy family all around.