In this chapter progress of various financial inclusion
initiatives of banks and government during recent years
and the related institutional developments are discussed.
Besides, there is a focus on examining some of the
evolving social and technological innovations—bank
branches, business correspondents, and ATM networks
aimed at extending the reach of financial services to the
excluded geographies and populations. The discussion
thus looks at both the emerging structure of individual-
centred banking in its many forms and dimensions and
the development of the infrastructural framework that
is central to its implementation. Particular attention is
given to a critical examination of the shift in strategic
focus represented by the newly launched Pradhan Mantri
Jan-Dhan Yojana (PMJDY) and the wide-ranging
ramifications of what is seen by many as a game changer
in the financial inclusion space.
2.1 FINANCIAL INCLUSION PLANS
ȍ2010ȃ13Ȏ: PROGRESS AND
PERFORMANCE OF BANKS 1
The Swabhimaan programme launched by the Ministry
of Finance, Government of India and the India Banks’
Association (IBA) aimed to bring banking within the
reach of the masses through brick and mortar branches
or through various forms of ICT-based models including
through business correspondents (BCs). All public and
private sector banks were advised to draw a three-year
financial inclusion plan starting from April 2010, duly
approved by their Board and with related business plans.
2.1.1 Evaluation of Financial Inclusion Plans
The RBI created a conducive and enabling environment
for access to financial services to extend door step bank-
ing facilities in all the unbanked villages in a phased
manner. A structured and planned approach to financial
inclusion was followed wherein banks prepared Board-
approved Financial Inclusion Plans (FIPs) congruent
with their business strategies for a three-year period
2010
–
13 (Figure 2.1).
The penetration of banking services in the rural
areas increased to a great extent during the first phase,
when 74,414 unbanked villages with population more
than 2,000 were identified and allotted to various banks
through State Level Bankers’ Committees (SLBCs)
for coverage through various modes, such as branches,
2
Financial Inclusion in India
Plans, Innovations, Challenges
