Indian economy in general and banking services in particular have made rapid strides in the recent past. However, a sizable section of the population, particularly the vulnerable groups, such as weaker sections and low income groups, continue to remain excluded from even the most basic opportunities and services provided by the financial sector. In order to address the issues of financial inclusion, the Government of India constituted a “Committee on Financial Inclusion” under the Chairmanship of Dr. C. Rangarajan. The Committee submitted its final report to Hon'ble Union Finance Minister on 04 January 2008.
The Committee on Financial Inclusion has defined Financial Inclusion as "the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.”
Among others, the Committee recommended setting up of two funds - Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF). Both these Funds have since been merged into a single Fund, the Financial inclusion Fund (FIF). The FIF is administered by an Advisory Board constituted by Govt. of India and maintained by NABARD.
Core Business of DFIBT
The core activities of the Department are to carry forward the agenda of financial inclusion of the excluded population at the national level as per the framework and scope described by the Report of the Committee on Financial Inclusion utilizing the Financial Inclusion Fund (FIF). The overall implementation is under the guidance of an Advisory Board set up for FIF by Government of India as per the new scope of activities and guidelines for utilization of the FIF finalized by RBI in consultation with GoI.
Corpus and Sources of Funds
The contribution to FIF is from the interest differential excess of 0.5% in respect of deposits placed by banks under RIDF and STCRC, which is credited to FIF w.e.f. 01 April 2012.