Banking regulations in India significantly promote financial inclusion, aiming to bring more people into the formal financial system. Financial inclusion refers to providing banking and financial services to everyone without discrimination. Its goal is to offer basic financial services to all, regardless of income or savings, focusing on delivering reliable financial solutions to economically disadvantaged groups without bias.

To facilitate account access, the Reserve Bank of India (RBI) mandates banks to offer Basic Savings Bank Deposit Accounts (BSBDA) with minimal or no balance requirements, simplifying account maintenance for low-income individuals. This makes opening and maintaining an account easier for low-income individuals.

RBI also encourages banks to expand branch networks in rural areas and utilize Business Correspondents as intermediaries to provide basic banking services like account opening and transactions in rural regions. RBI also encourages the Co-lending model by Banks and NBFCs to reach the locals.

Simplified KYC norms further reduce documentation barriers, especially in rural areas, by allowing Aadhaar cards for KYC verification. Additionally, the RBI caps transaction costs to ensure that banking services remain affordable for low-income users.

Regulatory efforts are crucial to tackling challenges such as the digital divide and low financial literacy while expanding the reach of financial services to enhance financial inclusion across India.