Functioning of Banking Industry and the Fruits of Financial Inclusion in India: A Critical Analysis of Scuffle between Expectations and Reality

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Shivika Bhandari, Shreya Vaish, Mr. Sachin Bhardwaj, Ms. Sherry Pant


Financial inclusion is gaining traction as a new model of economic development that can help the country escape poverty. Such inclusion refers the provision of banking services to the general public including both privileged and disadvantaged individuals on reasonable terms and circumstances. In terms of economic progress and societal advancement, monetary inclusion is a top objective for the country. With a larger part of the rural populace being untouched by India’s inclusive growth pat, the idea of financial inclusion stands as one of the major tests for the Indian economy which still needs to be cleared. Right from the year 2005, recurring efforts have been put up by the Indian government and the Reserve Bank of India in the direction of creating an equitable and financially inclusive economic atmosphere. However, the results of these are meagre in front of the aspirations of a giant economy. A study conducted in the year 2003, revealed that the contribution of organised sector institutions inclusive of banks, cooperative societies, micro- finance institutions had provided credit access to a meagre 27 percent of total household in the country. The research paper will critically analyses the policies of the Government of India and Reserve Bank of India on the line of inclusive growth of economy. Additionally, the study assesses the slow growth rate and lack of innovations. Further evaluate the importance and worth of existing system of inclusive growth through banking sector.

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