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Financial Deepening | Catalyst for Growth |
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C Rangarajan
Financial Deepening in India
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Sunil Mitra
Tax Reforms Mandatory to
Sustain Economic Growth
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Hari Sankaran
A Case to Make the Infrastructure
Play
Key to Inclusive Growth
more |
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Subir Gokarn
Reaping the Demographic Advantage
more |
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Joseph Massey
Capital Markets can Deepen
Inclusive Growth
more |
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Gagan Rai
Financial Deepening: Need of the Hour
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Jahangir Aziz
The Necessity of Financial Inclusion
more |
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Santanu Paul
Role of Technology and Human Capital in
Financial Deepening
more |
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Ashima Goyal
India on the Growth Turnpike
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| Financial Inclusion - 2012: Insights and Expectations |
| Financial Inclusion - 2012: Insights and Expectations more... |
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K C Chakrabarty
Putting Financial Inclusion into Mission Mode
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D Krishnan
Empowerment Through Mobile Phones
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Usha Thorat
Financial Regulation and Financial Inclusion
Working Together or at Cross-Purposes
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States Need to be Proactive Recent developments in technology have transformed banking from the traditional brick-and-mortar infrastructure to a system supplemented by other channels like automated teller machines (ATM), credit/debit cards, internet banking, online money transfers, etc. The point, however, is that access to such technology is restricted only to certain segments of society. As my recent experience in four states shows, financial inclusion is today on everyone's agenda, but the important thing is what happens on the ground.
The Reserve Bank of India (RBI) has enabled branchless banking by facilitating the business correspondent/facilitator model, enabling non-government organizations, micro-finance bodies, co-operative societies, grocery shops, PCOs and individuals to collect small deposits, disburse and recover certain loans, and also sell other financial products, like insurance, pension and mutual funds, and to handle small remittances and payments. But is it also true that while a large number of no-frills accounts have been opened; those that are operational have yet to reach a meaningful level? On its part, the government has also unveiled a number of initiatives to mainstream the marginalized, like making small borrowers eligible for another loan, issuing them credit cards without security, asking banks to adopt one district for 100 per cent financial inclusion, and establishment of the financial inclusion fund and the financial inclusion technology fund. This apart, there are over 83 million Kisan Credit Cards. Similarly, there are over 5 million self-help groups (SHGs) having savings of almost Rs 40 billion... more
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The key lesson that emerges from all initiatives to promote financial
inclusion is that without the active
role of the States, institutions at the grassroots level cannot be promoted,
says G C Chaturvedi
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Enabling Financial Inclusion through Insurance Micro-insurance has become a buzzword today, reaching out in ways not
imagined earlier to the financially excluded. It has helped create
awareness about savings and security-based instruments even amongst the
not-so-literate and the financially weak. But this was not always the
case even though over 60 per cent of the country's population operates
out of segments that have hitherto been beyond the reach of insurance
companies. The reasons were varied: logistical difficulties, poor
paying capacity of the people or the operational structure of the
financial institutions which rendered operations economically
unfeasible or the quantum of investment was very low value-wise.
What was also not understood was that such insurance could help enable
financial inclusion of these excluded communities, something that has
been on the agenda of all governments. What was also not understood
that micro-insurance, is different from insurance in general as it is a
low value product, which requires different design and distribution
strategies such as premium based on community risk rating (as opposed
to individual risk rating), active involvement of an intermediate
agency representing the excluded communities and so forth.
Understanding the necessity to reach out to this vast uncovered
population, which no insurance company, both public and private sector,
had thought to serve in a structured way, Bajaj Allianz Life Insurance
sought to create a revolution by covering a huge, geographically
widespread mass, educating people on the need for personal security and
saving avenues. Motivating it were these stark facts..
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Two million new insurance clients in less than a year and plans for up to
10 million by the end of 2011-such numbers are only possible in a country like India, says Yogesh Gupta
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