RBI Policies on Financial Inclusion – An Overview

Financial Inclusion has been viewed as major contributors to the development of an economy. Government of India realized the crucial role of financial inclusion for inclusive growth of the country and put it in policy priority in 2005. RBI introduced the policy on financial inclusion to eradicate the financial exclusion. Present paper studies the various measures initiated by Reserve Bank of India in the direction of achieving goal of financial inclusion. Such measures include opening of no-frill accounts; relaxation in KYC norms; introduction of BCs / BFs models; adoption of EBT by using ICT based banking; offering General Credit Cards; OD facility; simplification of loan application process; easy and timely credit to farmers for farm and non-farm activity, tiny enterprises and priority sector; credit for housing, marriage and others etc. The paper also studies the reports of various committee formed by RBI to propose recommendations for achieving greater financial inclusion. Reserve Bank of India asked all commercial banks to participate enthusiastically in the process of financial inclusion. RBI instructed banks to start campaigning and create awareness about banking services among financially excluded people. Thus, RBI emphasized all banks to open “Financial Literacy and Counseling Centers” for covering more and more people under formal financial system.