Financial Inclusion in India

11 Pages Posted: 23 Jan 2011

Multiple version iconThere are 2 versions of this paper

Date Written: January 22, 2011


Financial Inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. The main focus of financial inclusion in India is to promote sustainable development and generating employment in rural areas for the rural population. Out of 19.9 crore households in India, only 6.82 crore households have access to banking services. As far as rural areas are concerned, out of 13.83 crore rural households in India, only 4.16 crore rural households have access to basic banking services. In respect of urban areas, only 49.52% of urban households have access to banking services. Over 41% of adult population in India does not have bank account. There are many factors affecting access to financial services by weaker section of society in India. Several steps have been taken by the Reserve Bank of India and the Government to bring the financially excluded people to the fold of the formal banking services. The 100 per cent financial inclusion drive is progressing all over the country. The State Level Bankers Committee (SLBC) has been advised to identity one or more districts for 100 per cent financial inclusion. So, far, the SLBC has identified 431 districts for 100 per cent financial inclusion. As on 31st March 2009, 204 districts in 18 States and 5 Union Territories have reported having achieved the target. Keeping in view the enormity of the task involved, the Committee on Financial Inclusion recommended the setting up of a mission mode National Rural Financial Inclusion Plan (NRFIP) with a target of providing access to comprehensive financial services to at least 50 per cent (55.77 million) of the excluded rural households by 2012 and the remaining by 2015.

Keywords: Financial Inclusion, Bank, RBI, Finance

JEL Classification: G21

Suggested Citation

Madurai, Karthikeyan Kothandaraman, Financial Inclusion in India (January 22, 2011). Available at SSRN: or

Karthikeyan Kothandaraman Madurai (Contact Author)

affiliation not provided to SSRN ( email )

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