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Financial Inclusion – NABARD?

The main goal of NABARD centres on making every individual aware of the basic concepts that are related to the financial sector. It can prove to be a great opportunity for individuals to improve their financial background.

Just like any other concept in daily life, one needs to have a common understanding of finance, as a fact to be able to make any significant changes regarding that. Hence, education towards that goal is of great necessity. Once acquainted with the financial sector, you will be able to understand the exact way it affects your life and come up with suitable countermeasures for whatever takes a wrong turn. To ensure a better financial standing for yourself, financial literacy is needed. 

National Strategy for Financial Inclusion

Lessons from other nations: According to data from RBI, more than 35 nations, including China, Brazil, and Indonesia, have national financial inclusion strategies as of mid-2018. 

These countries share some common traits, such as 

(i) adopting a target-based strategy (by focusing on particular sectors), 

(ii) enhancing the necessary infrastructure of payment mechanisms, 

(iii) having a sound regulatory framework, 

(iv) emphasising last-mile delivery and financial literacy, 

(v) utilising innovation and technology, and 

(vi) periodically assessing the progress made in promoting financial inclusion.

Financial inclusion initiatives: The RBI observed that a number of initiatives have been put in place to increase financial inclusion in the nation. These include:

(i) the Pradhan Mantri Jan Dhan Yojana (PMJDY), which as of January 2019 had 34 crore accounts open with deposits totaling Rs 89,257 crore;

(ii) programmes like the Pradhan Mantri Suraksha Bima Yojana, which offers accidental death or disability coverage, and the Atal Pension Yojana, which offers pension coverage to bank account holders who subscribe.

Financial inclusion should be quantified using criteria that are spread among three main indicators, according to RBI. These include criteria to: 

(i) measure access, such as the proportion of adults with a savings account, insurance, or pension plan; 

(ii) measure usage, such as the percentage of adults with a grievance redressal procedure; 

(iii) measure quality of services, such as grievance redressal.

Strategic Objectives for Financial Inclusion

The RBI identified six strategic goals for a national strategy for financial inclusion: 

(1) universal access to financial services, 

(2) provision of a basic range of financial services, 

(3) access to livelihood and skill development, 

(4) financial literacy and education, 

(5) customer protection and grievance redressal, and 

(6) efficient coordination

By March 2020, every village (or hamlet of 500 households in hilly areas) within a five-kilometre radius will have access to banking services. By March 2022, digital financial services will be strengthened to build the foundation for a society without cash. And by March 2024, every adult will have access to a financial service provider via a mobile device.

Banking Technology Adoption

It is quite obvious for us to witness changes with the change in time. The same can be seen in the banking sector. These days the best and most effective way to ensure safe banking is the medium of electronic banking. It in itself gives an account of the way the economic sector is changing on its own. It is turning into something easier to operate, reliable and safe to its utmost limits. 

Relating the banking sector with technology has become a common occurrence. It is easy to notice seeing as most of the transactions and payments are being made using electronic means. It just reinforces the known facts that this medium of banking is far safer compared to the method previously used. 

Conclusion

In order to increase demand for financial services, particularly those provided on the digital platform, NABARD has supported financial literacy efforts through a number of projects. Additionally, NABARD has expanded support for onboarding to digital platforms, enhancing connectivity, and meeting regulatory criteria in order to strengthen the supply side of the financial sector.

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