Financial inclusion refers to a process for ensuring access to timely and adequate credit where needed by vulnerable sections such as the weaker sections and the low income groups at an affordable cost through appropriate delivery channels for potentially vast sections of commercial banks’ clientele.

Financial inclusion can be described as the provision of affordable financial services, viz saving, credit, insurance services, access to payments and remittance facilities by the formal financial systems to those who are excluded.

In a country like India where rural areas are more than Urban areas there financial inclusion becomes an important constituent of the development process. It has been a combined effort of successive governments, regulatory institutions, and civil society since India’s independence that has increased the financial-inclusion net in the country.

Financial Inclusion Initiatives

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS):

• This scheme aims to enhance the livelihood of the rural people by guaranteeing at least one hundred days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. As the payments are made through the bank/post office accounts, in 2010-11, nearly 10 crore bank/post office accounts have been opened.

Kisan Credit Cards (KCC) and General Credit Cards (GCC) Issued:

• :Under FIPs RBI advised to banks to issue smart cards to farmers for availing timey and adequate credit facilities.

  Jan Dhan-Aadhar-Mobile (JAM) Trinity:

• A combination of Aadhaar, PMJDY, and growing mobile communication has transformed citizen access to governments.
• This highly secure and easily verifiable system, as brought about by the Aadhaar card, is easy to obtain as well in order to assist in the process of financial inclusion.
• The government had introduced many flagship schemes regarding the promotion of financial inclusion and bringing financial security towards the empowerment of the people who are considered 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 Semi-Urban Areas:

• Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) have taken various initiatives to promote financial inclusion in rural areas.
• These include the opening of bank branches in remote areas.
• Linking Self Help Groups with banks.
• Installation of more number of ATMs
• Basic Savings Bank Deposit Account (BSBDA) opened through branches and BCs:

• Banking model of Business correspondents, etc.

  Promotion of Digital Payments:

• Aadhar enabled payment system (AEPS) thus facilitates an AEBA to become portable and usable at any place and at any time, through micro ATMs.
• Offline transaction enabling platforms such as Unstructured Supplementary Service Data (Mobile banking without Internet and on a basic handset Mobile Banking.
• Advertisement of phonepay, Googlepay and more banking and insurance digital payment method.

Enhancing Financial Literacy:

• The Reserve Bank of India launched a programme called, “Project Financial Literacy”.
  The Objective of the project is to create awareness about the Central Bank and other general banking terms to different target groups such as school college going children women of the low income group rural and urban poor, Defence personnel and senior citizens.
• Pocket Money : SEBI and NISM’s flagship programme is meanted for raising students’ awareness about Personal Finance and share market. The objective is to enable school students to appreciate the aspects of money, saving, investing and planning.

Conclusion:

Rural populations are becoming more aware and understanding of financial products. Now many Individuals have been able to invest in businesses, education, and health with greater access to credit and financial services. We can say that Historically financial inclusion great influence rural area. They have gained better access to financial services, fostering economic participation and reducing inequality.