Financial Inclusion, Service and Technology

Financial Inclusion: Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs - transactions, payments, savings, credit and insurance - delivered responsibly and sustainably. 7 out of 17 Sustainable Development Goals identify financial inclusion as an enabler.

The G20 pledged to promote financial inclusion globally and reaffirmed its commitment to implementing the G20 High-Level Principles on Digital Financial Inclusion. The World Bank Group views financial inclusion as a key factor in reducing extreme poverty and increasing shared prosperity.

Financial Inclusion

Financial Inclusion Initiatives

Jan Dhan-Aadhar-Mobile (JAM) Trinity

• The combination of Aadhaar, PMJDY, and the growth of mobile communication has transformed citizens' access to government services.
• As of March 2020, the total number of beneficiaries of the Jan Dhan program was estimated at over 380 million.
• Significantly changing the concept of identity for individuals, Aadhaar has not only brought about a secure and easily verifiable system but also a system that is easily accessible and helpful in the process of financial inclusion.
• The government has also launched many flagship programs to promote financial inclusion and provide financial security to empower the poor and unbanked in the country.
• These include Pradhan Mantri Mudra Yojana, Stand-Up India Scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana.

Expansion of Financial Services in Rural and Urban Areas

• Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) have taken initiatives to promote financial inclusion in rural areas.
• These include opening bank branches in remote areas.
• Issuance of Kisan Credit Cards (KCC)
• Linking of Self-Help Groups (SHG) with Banks.
• Increase the number of ATMs
• Correspondence model of banking etc. companies.

Promotion of Digital Payments

• With NPCI-approved Unified Payments Interface (UPI), digital payments have increased. safe compared to before.
• Aadhar Enabled Payment System (AEPS) enables access to Aadhar Enabled Bank Account (AEBA) anywhere, anytime through a micro-ATM.
• The payment system has become more accessible thanks to platforms enabling offline transactions, such as Unstructured Supplementary
• Service Data (USSD), which makes it possible to use mobile banking services even without the Internet, even with a basic mobile phone.

Improving Financial Literacy

• The Reserve Bank of India has launched a project called "Project Financial Literacy".
• The aim of the project is to convey information about the central bank and general banking concepts to various target groups including school children, women, rural and urban poor, armed forces, and the elderly.
• Pocket is the flagship of the Securities and Exchange Board of India (SEBI) and the National Institute of Securities Markets (NISM), which aims to increase financial literacy among school children.
• The aim is to help school children understand the value of money and the importance of saving, investing, and financial planning.

Financial Inclusion Through Financial Technology (FinTech)

• To improve financial inclusion in India, FinTech companies are helping rural individuals apply for loans from authorized sources through mobile phones.
• Some of the latest FinTech options used by individuals include crowdfunding, peer-to-peer networks, e-wallets, etc.
• FinTech companies have succeeded in providing financial services to disadvantaged people at little or no cost.

Financial Inclusion Through Digital Payment Systems

Digitization of Financial Transactions

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