What is Financial Inclusion?
The Committee on Financial Inclusion headed by Dr. Rangarajan has defined Financial Inclusion as "the process of ensuring access to financial services and timely & adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost”.
The Committee suggested several measures to accelerate the pace of financial inclusion. The various financial services include access to savings, loan, insurance, payments and remittance facilities to the entire population without discrimination of any type.
Steps to ensure Financial Inclusion
- Opening No-frills SB accounts
- Issuing General Purpose Credit Cards
- Granting Overdraft facilities in SB accounts
- Providing banking services at the door step of villagers through Smart Cards.
ICT based Financial Inclusion - Smart Card Banking (SCB)
SCB enables the account holders to operate their accounts at their own place without visiting the branches. Customers will be given Bio-metric smart cards which are swiped through Hand Held Devices (small POS machines) with the assistance of a Business Correspondent who receives or gives cash under a prior arrangement with the Bank.
Adequate security features like identification by photo on the card, authentication by finger impression, announcement of transaction in local language and transaction slips are built in the system.
Advantages of SCB:
- Easy access to banking at the door step promotes savings.
- As customers do not visit branch, branches with large number of SB a/cs, pension a/cs, insurance a/cs can serve in a better way.
- Branch Business grows with new customer base.
- Recovery from the villages made easy.
- Online transactions ensure hassle free accounting. Payment under NREGA is facilitated.