Initiatives by Indian Commercial Banks towards Financial Inclusion for Sustainable Growth

Abstract

Financial inclusion has become synonymous with the opening of bank accounts. It needs to be much more. We found a clear differentiation between bank accounts linked with livelihood and those just opened for the sake of opening a bank account. An analysis of 50 lakh individual, no-frill accounts revealed that the average balance in livelihoodlinked accounts was about Rs.11000, while in others, the average balance was just Rs.176. The banking environment in India had grown more competitive with the relaxation of restrictions and adoption of International standards banks are forced to adopt measures to survive. The recent financial reforms and greater competition in the banking industry have made it necessary for banks in India to concentrate towards the excluded mass. Successful banks in India focus on the rural sector by providing financial inclusion service. Reserve Bank of India (RBI) has formulated the policy of financial inclusion with a view to provide banking services at an affordable cost to the disadvantaged and low-income groups. This topic studies on the initiatives by commercial banks in financial inclusion. An effort has been made to study and find out whether commercial banks has made any progress towards ensuring broader banking services for the rural poor people in strengthening the India’s position in relation to financial inclusion.