Issues and challenges in Financial Inclusion.pptx

Meaning and definition of Financial Inclusion. Historical Events, Govt initives, issue and challenges in Financial inclusion.

1. ISSUES AND CHALLENGES IN FINANCIAL INCLUSION By SUJIT GAVHANE

2. TABLE OF CONTAINS Meaning of Financial Inclusion Definition of Financial Inclusion Objective Historical Events In Financial Inclusion Reports of Committees On Financial Inclusion Government Initiatives Issues In Financial Inclusion Challenges In Financial Inclusion Conclusion

3. Meaning of Financial inclusion Everyone has access to useful, affordable and responsible, finance products and services, Such as – Bank account Savings Credit Insurance to meet their needs.

4. Definition Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost. Dr. C. Rangarajan Committee Report 5

5. Who are these people ? Unprivileged section in rural and urban areas like, Farmers, small vendors,etc .
Agricultural and industrial labourers
People engaged in un-organised sectors
Unemployed
Women
Children
Old people Physically challenged people.

6. Objectives Of Financial Inclusion Provide universal access to financial services. Provide low cost credit to low income groups, farmers an small entrepreneur. Empower women and marginalised groups through financial participation. Encourage small savings and investments for financial security.

7. 8 1969 : Nationalisation of banks. 1975 : Establishment of Regional Rural Banks. 1992 : SHG Bank linkage program by NABARD. 2005 : No frills accounts introduced by RBI. 2006 : Business Correspondence model Launched . 2014 : Pradhan Mantri Jan Dhan Yojana started. 2016 : UPI and DBT initiated. Historical Events In financial inclusion

8. Reports of Committees on Financial Inclusion Dr. Rangrarajan Committee (2008) Defined Financial Inclusion. Establishment of a National Mission on Financial Inclusion. Recommendation of creation of two funds with NABARD. 1.Financial Inclusion Promotion & Development Fund. 2.Financial Inclusion Technology Fund 2. Nachiket Mor Committee (2014) Establishment of Payments Banks and Small Finance Banks. Universal Electronic Bank Account (UEBA) Provision of a full-service electronic bank account to every Indian resident above the age of 18. Priority sector lending should increase from 40 %to 50%. 9

9. Government Initiatives Pradhan Mantri Jan Dhan Yojana . Pradhan Mantri MUDRA Yojana Direct Benefit Transfer RuPay debit Card UPI Kisan Credit Card Pradhan Mantri Suraksha Bima Yojana 10

10. Issues In Financial Inclusion 1. Low Financial Literacy Unable to understand and use financial services effectively. Especially in rural areas. Digital Connectivity Gap Limited internet access and smartphone usages in remote areas, for using mobile banking, UPI, Digital payments etc. 3. Women Disempowerment All financial transactions in hand of men. Limited access to women 4. Inadequate infrastructure Rural and remote area having lack of infrastructure like Branches, ATM, Digital banking points etc. 5. High Cost of services For low income groups, interest rate on credit can be expensive, which they cannot bear.

11. Challenges in Financial Inclusion 1. Low Income : Poverty and unemployment is today’s major issue in India. If low income then there is chance of no saving. It is directly affect to Financial Inclusion . 2. Psychology and Disability issue : Lack of trust, fear of technology, and low confidence among disadvantaged groups. Difficult for blind person to use ATMs or absence of ramps in ATM and banks which exclude disabled persons from using banking services fully. 3. Geographical Remoteness Remote areas like rural, hilly and tribal area having poor access to banking services, due to lack of transport, branches ATMs, Internet etc. 4. Illiteracy Illiteracy prevent from using banking services like using ATMs, mobile banking, UPI etc.. 5. Cybersecurity Rising frauds make people hesitate to using digital banking. 12

12. 6. Language Barriers In rural areas language of bank employees and customers is different, it directly affect usages of availing banking services by customers. 13

13. Conclusion The benefits of financial inclusion are not limited to the individual level, but they will boost the entire Indian economy. Today, we have reached a milestone achievement in financial inclusion, but we need to make further efforts with the help of emerging technologies. Financial inclusion is a powerful accelerator of economic progress, and can help to achieve the goals and eliminating extreme poverty and financial untouchability. The government should focus more on current economic problems such as unemployment, income inequality, inflation, and infrastructure development in rural areas. 14

14. Thank You !