Indian Financial System

It has been more than 60 years of independence, a large section of Indian population still remains not under Indian Financial System. In the past years, the government and RBI has been pushing the idea of financial inclusion. The idea aims at providing easy access to financial services to those sections of the society who are deprived of it so far at affordable cost thereby bringing them into the mainstream of financial sector. RBI set up the Khan Commission in 2004 to look into financial inclusion and the recommendations of the commission were incorporated into mid term review of the policy (2005-2006) and urged banks to review their existing practices to align them with the objective of financial inclusion. Honorable Prime Minister Narendra Modi announced Pradhan Mantri Jan Dhan Yojana scheme for comprehensive financial inclusion on his first Independence Day speech on 15th August, 2014.

The scheme was formally launched on 28th August, 2014 with a target to provide universal access to banking facilities starting with Basic banking accounts with overdraft facility of Rs. 5,000 after six months and RuPay Debit Card with inbuilt accident insurance cover of Rs. 1 Lakh and RuPay Kisan card. Pradhan Mantri Jan Dhan Yojana, is an ambitious scheme for comprehensive financial inclusion launched by the Prime Minister of India, Narendra Modi on 28th August, 2014. He had announced this scheme on his first Independence Day speech on 15th August, 2014. In a run up to the formal launch of this scheme, the Prime Minister personally mailed to CEOs of all banks to gear up for the gigantic task of enrolling over 6 crore (75 Million) households and to open their accounts. In this email he categorically declared that a bankaccount for each household was a "national priority".

The scheme has been started with a target to provide universal access to banking facilities starting with basic banking accounts with overdraft facility of Rs. 5,000 after six months and RuPay Debit Card with inbuilt accident insurance cover of Rs. 1Lakh and RuPay Kisan card. In the next phase, micro insurance and pension etc. will also be added. Reports said that, on 28th August, more than 1.5 crore bank accounts were opened in a single day. The main objective of this scheme is that easy financial services for the excluded section i.e. weaker sections and the low income group. As per the scheme one could open an account in any bank branch or business correspondent outlet with zero balance. The process of opening an account has been made easier. It is an approach to bring about comprehensive financial inclusion of all households in the country. The aim of the scheme is access to banking facilities, financial literacy and access to credit.