India is Banking

Since India started worrying about its economy, there have been several measures to achieve financial inclusion. Financial inclusion is a great tool to get to the ground reality of financial standards of all citizens. It can also help arrest leakages in the delivery of welfare programmes. Census 2011 estimated that out of 24.67 Crore households, 14.48 Crore (58.7%) households had access to banking services. In specific, only 54.46% of rural and 67.68% of urban households are connected with banking system and are included financially. The present banking network of the country (as on 31.03.2014) comprises of a bank branch network of 1,15,082 and ATM network of 1,60,055. The efforts to achieve financial inclusion by the Govt. Of India included constituting a committee under the chairmanship of Dr.C.Rangarajan. The report evidently interpreted the financial inclusion as an instrument for social transformation. Access to finance by the poor and deprived sections is key to inclusive growth.

The launch of Pradhan Mantri Jan Dhan Yojana(PMJDY) in the wake expediting the process is significant at times when world sees it is “India’s chance to fly”. PMJDY is a mass programme aimed at providing basic banking services to every household in this country. The programme has been channelled to cover every nuke and corner of the country which India has not attempted before. For example, the govt. launched “Swabhiman”, a scheme aimed at opening bank accounts for every household in villages whose population is more than 2000. But, PMJDY without any constraints to cover both rural and urban households. While Aadhar card laid foundation for large scale financial inclusion reforms, PMJDY followed it.

Kerala is the first state to have atleast one bank account for each household i.e., reached targets set by PMJDY. This could not be possible unless state government of kerala actively took the initiation forward. For the first time in India, states are empowered to oversee national interests in this regard. The state of Andhra Pradesh made tremendous progress in financial inclusion by seeding every welfare scheme with the Aadhar card. This is true to the spirits of competitive federalism. Arun Jaitley in his budget speech announced that over 12 crore households were brought into financial mainstream in just 90 days breaking all predictions. PMJDY provides a basic savings bank deposit account (as per the definition of RBI). This account is a zero balance account and would offer a RUPAY debit card with in-built accidental insurance upto 1Lakh. RUPAY, an indigenous debit card developed by National Payments Corporation of India (NPCI) would promote cashless transactions which economy wants for many reasons.

When I started to believe that, a 12 digit Aadhar number itself can act as an account number which would further ease account opening with post offices, the launch of PMJDY made me understand that “India cannot wait because it is already late” for that matter. Corporate banks are made involved in the programme which is a good sign. This would further increase FDI in the banking space. It is appreciable that the new govt. did not drop Aadhar rather continued strengthening the process of Direct Benefit Transfers (DBT). Now, it is clear that financial inclusion is not a onetime effort; it is an ongoing process. It is the only way India can overcome poverty through directing subsidies correctly. With the combined efforts of all stakeholders, viz.,policy makers, bankers, market regulators, NGOs and other similar entities, this can be made possible.

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