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Financial Inclusion

Financial inclusion is the process of ensuring access to appropriate financial products and services for vulnerable groups and low-income individuals at an affordable cost through mainstream institutions in a fair manner. Financial inclusion has become a critical aspect for inclusive growth and development. Many countries now see financial inclusion as key to more comprehensive growth by allowing citizens to use earnings to improve their financial status and contribute to national progress. Initiatives for financial inclusion come from financial regulators, governments, and banks, with the banking sector taking a leading role in promoting inclusion.

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Amrita Shettigar
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28 views

Financial Inclusion

Financial inclusion is the process of ensuring access to appropriate financial products and services for vulnerable groups and low-income individuals at an affordable cost through mainstream institutions in a fair manner. Financial inclusion has become a critical aspect for inclusive growth and development. Many countries now see financial inclusion as key to more comprehensive growth by allowing citizens to use earnings to improve their financial status and contribute to national progress. Initiatives for financial inclusion come from financial regulators, governments, and banks, with the banking sector taking a leading role in promoting inclusion.

Uploaded by

Amrita Shettigar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Financial inclusion is the process of ensuring access to appropriate financial products and services needed by vulnerable groups such

as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by mainstream institutional players. Financial inclusion has become one of the most critical aspects in the context of inclusive growth and development. The importance of an inclusive financial system is widely recognized in policy circles and has become a policy priority in many countries. Several countries across the globe now look at financial inclusion as the means to more comprehensive growth, wherein each citizen of the country is able to use earnings as a financial resource that can be put to work to improve future financial status and adding to the nations progress. Initiatives for financial inclusion have come from financial regulators, governments and the banking industry. The banking sector has taken a lead role in promoting financial inclusion.
Financial Regulation and Financial Inclusion Working Together or at Cross-purposes1 The case for financial inclusion is not based on the principle of equity alone access to affordable banking services is required for inclusive growth with stability. Achieving financial inclusion in a country like India with a large and diverse population with significant segments in rural and unorganised sectors requires a high level of penetration by the formal financial system. Even in areas that are well covered by banks, there are sections of society excluded from the banking system. Political and social stability also drive financial inclusion. In the recent period, in countries like India, government has been encouraging opening of bank accounts by providing government benefits through such accounts. ICT solutions have made such initiatives possible at relatively low cost. Financial inclusion is not merely providing reliable access to an efficient payments system. Many discussions- especially in the context of mobile phone-led retail payments system- seem to focus on this aspect of financial inclusion. Financial inclusion is also not just micro finance. Financial inclusion represents reliable access to affordable savings, loans, remittances and insurance services. We in India believe that financial inclusion primarily implies access to a bank account backed by deposit insurance, access to affordable credit and the payments system.

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