Financial Inclusion in Indian Banking Sector –Emerging Models

Santosh Ranganath Neelam, Tualsi Rao Gunta

Abstract


Economic reforms implemented in India since 1990 have included the development of the financial system. This has resulted in the expansion of both the banking sector and the stock market. However, the Indian banking sector is still relatively small compared with the banking sectors of most East Asian economies, and there is scope for expansion. Individual Indian banks are also small by international standards. Furthermore, the Indian corporate bond market is still immature and has not even started to develop on a significant scale. India’s rapid growth since 2000 has been accompanied by increases in both savings and investment rates. This process has also brought an increase in external procurement of financial resources. This suggests that external financing plays an important role in the achievement of high economic growth. This paper include the structural expansion of bank credit through the expansion of financial savings, and the improvement of the efficiency of financial intermediation and the allocation of financial resources. These goals will require further improvements in the efficiency of the banking sector, and the setting of loan and deposit interest rates at levels that reflect market realities. Other essential steps include a review of the statutory liquidity ratio (SLR) system and priority sector lending, and the promotion of financial inclusion. This paper explains several models which requires the emerging role of Financial Inclusion in Banking Sector in India

Keywords: SLR System, Export led Growth, Un-bankable, Financial education, Technology.

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ISSN : 2251-1563