Financial Inclusion Case Study

1270 Words6 Pages
The size of the financially excluded population in the world is massive: according to the United Nations, roughly 2.5 billion people around the globe lack access to formal financial services i.e. Banking services – such as a bank account, credit, insurance, a safe place to keep savings and a protected and effective means to receive social benefit payments – through a registered financial institution. Though this problem is universal, the level of financial exclusion has assumed more horrific dimensions in developing countries like in India. In India nearly half of the country is unbanked. India has the highest number of households which are excluded from Banking. There is only one bank branch per 14,000 people present in India. Just 18…show more content…
Recent advances in technology such as handheld devices, mobile telephones, low-cost ATMs have also opened up several delivery channels for providing financial services to the poor. The current decade might, be see the beginning of successful business models as banks have begun to view financial inclusion as a viable business opportunity. The need of the hour for banks, therefore, is to develop business models that enable financial inclusion and are also profitable over the medium to long-term. RBI 's Policy on 'Financial Inclusion: Sometimes bankers do not give the desired attention to certain areas, the watchdogs have to step in to remedy the situation. This is the reason why the Reserve Bank of India places a lot of emphasis on financial inclusion. With a view to enhancing the financial inclusion, as a proactive measure, the RBI in its Annual Policy Statement of the year 2005-2006, while recognizing the concerns in regard to the banking practices that tend to exclude rather than attract vast sections of population, commended banks to review their current practices to line up them with the objective of financial…show more content…
Mandatory documents must be provided like address proof, passport size photos. Further, in order to ensure that persons belonging to low income group both in urban and rural areas do not face difficulty in opening the bank accounts due to the procedural hassles, the 'KYC ' procedure for opening accounts for those persons who intend to keep balances not exceeding rupees fifty thousand (Rs. 50,000/-) in all their accounts taken together and the total credit in all the accounts taken together is not projected to exceed rupees one lakh (Rs. 1,00,000/-) in a year has been simplified to enable those belonging to low income groups without documents of identity and proof of residence to open banks accounts. In such cases banks can take introduction from an account holder on whom full KYC procedure has been completed and has had satisfactory transactions with the bank for at least six
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