Financial inclusion is fast losing steam in India
By K Srinivasa Rao
The recent Report on Trend and Progress of Banking in India 2017-18 points out some early signs of slowdown in financial inclusion (FI) efforts. This could undermine the formidable achievement so far in the journey of taking banking to the masses to ameliorate poverty. Amidst the asset quality mess and its multiplier impact, banks seem to be losing appetite to pursue FI.
It may be recalled that banks began to implement financial inclusion as part of their business policy only after the RBI directed them to adopt a three-year board-approved financial inclusion policy (FIP) that began in 2010. It laid a firm roadmap for opening brick-and-mortar branches and spread of alternative modes of banking.
Financial inclusion got a boost from the Pradhan Mantri Jan Dhan Yojana (PMJDY) that added 336.6 million new basic savings bank deposit (BSBD) accounts, expanding the base of such accounts to 536 million by March 2018.
Photo courtesy of Satish Krishnamurthy.