Financial Inclusion Department
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 described by the Report of the Committee on Financial Inclusion in general and operationalising the Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF), in particular. The implementation is under the guidance of the two Advisory Boards set up for FIF and FITF respectively.
The objectives of the two funds viz. FIF and FITF are:
Objectives of FIF
To support “developmental and promotional activities” with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions/ hitherto unbanked areas.
Objectives of FITF
To enhance investment in Information Communication Technology (ICT) aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, increase the technological absorption capacity of financial service providers/ users and encourage an environment of innovation and cooperation among stakeholders.
Corpus and Sources of Funds
Each of the Funds shall consist of an overall corpus of Rs. 500 crore, with initial funding to be contributed by the GoI, Reserve Bank of India (RBI) and NABARD in a ratio of 40:40:20. The funding would be contributed in a phased manner over a maximum period of five years, depending upon utilisation of funds. As of now Government of India has contributed Rs. 10 crore and NABARD Rs. 5 crore for each of the two funds.
Eligible Activities/ Purposes - FIF
- Funding support for capacity building inputs to Business Facilitators and Business Correspondents;
- Providing promotional support to institutions, such as, Resource Centres, Farmers’ Service Centres and Rural Development and Self Employment Training Institutes to enable them to provide improved technical and financial services (including counseling) aimed at increasing technology adoption, effective management of assets, nurturing entrepreneurial capacity and increasing financial education and literacy;
- Providing funding support for promotion, nurturing and credit linking of Self Help Groups (SHGs);
- Capacity building of personnel of NABARD, banks, Post Offices, State Government Departments, MFIs, NGOs, Local Level Associations, members of SHGs/ Joint Liability Groups, etc.;
- Defraying expenses of approved institutions for undertaking interventions for financial inclusion in Central, Eastern and NER Regions; J&K, Himachal Pradesh and Uttarakhand;
- Funding support for setting up of Rural Credit Bureaus and credit rating of rural customers;
- Supporting initiatives of local level associations/ federations;
- Supporting pilot projects for development of innovative products, processes and prototypes for financial inclusion; and
- Any other developmental and promotional interventions recommended by the Advisory Board for the FIF.
Eligible Activities/ Purposes - FITF
- Encouraging user friendly technology solutions;
- Providing financial support to technological solutions aimed at providing affordable financial services to the disadvantaged sections of the society;
- Creating a common technology infrastructure with comprehensive credit information;
- Funding support to technologies facilitating the documentation for processing of loans;
- Providing viability gap / pilot project funding for unproven but potential technological interventions;
- Conduct of studies, consultancies, research, evaluation studies relating to technological interventions for financial inclusion;
- Promoting seminars, conferences and other mechanisms for discussions, dissemination relating to financial inclusion technological interventions;
- Publication of financial inclusion technology literature, publicity material, etc.;
- Capacity building of personnel of banks, Post Offices, State Government Departments, MFIs, NGOs, VAs, other stakeholders; and
- Any other activity as may be approved by the Advisory Board.
Eligible Institutions for FIF
- Financial Institutions, viz., NABARD, Commercial Banks, Regional Rural Banks and Cooperative Banks;
- NGOs, MFIs, SHGs, Farmers’ Clubs, Local Level Associations, etc.;
- Training and research organisations, academic institutions, universities;
- Service providers like Insurance Companies (providing micro insurance services), Post Offices, Railways, etc.;
- Any other organisation whose objectives are in conformity with the overall objectives of the FIF and are approved by the Advisory Board from time to time.
Eligible Institutions for FITF
- Financial Institutions, viz., NABARD, Commercial Banks, Regional Rural Banks and Cooperative Banks;
- NGOs, MFIs, SHGs, Farmers’ Clubs, Local Level Associations, etc.;
- Technology Service providers and other service providers like Insurance Companies (providing micro insurance services), Post Offices, Railways, etc.;
- Any other institution/ organisation whose objectives are in conformity with the overall objectives of the FITF and are approved by the Advisory Board.
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