Role of Financial Inclusion in the Development of Indian Economy

Abstract

Mobilization and circulation of finance is the primary requirement of development of an economy. Achieving inclusive growth makes financial inclusion a key policy concern for a developing nation like India.The basic objective of the study is to analyse the effect of financial inclusion in the growth of Indian economy and the initiatives taken by the banking institution in India to attain inclusive growth.The Government of India and the Reserve Bank of India have been making concerted efforts to promote financial inclusion as one of the important national objectives of the country.

This paper attempts to assess the current status of financial inclusion on the development of Indian economy by analyzing five state bank group and five private sector banks.Bank growth rate in terms of number of bank branches, offsite and onsite ATM,usage of debit card and credit cards were analysed. It was observed from the study that the usage of debit card has increased tremendously throughout the study period and banks focused more on rural and semi-urban areas.But still it is disheartening to note that the number of people with access to the products and services offered by the banking system continues to be very limited, even years after introduction of inclusive banking initiatives in the country,like cooperative movement, nationalization of banks, creation of regional rural banks,etc.From this it can be concluded that the financial inclusion contribute much to the development of Indian economy and there is further scope for achieving inclusive growth.

Keywords: Financial Inclusion, SCB, On-site & Off-site ATM.