Financial inclusion means making banking, credit, insurance and other financial services available to all people, especially the poor and rural population, at affordable cost. It helps reduce poverty and brings more people into the formal economy. The topic is important for Banking and SSC exams.
Meaning and Need
- It ensures access to a basic bank account, savings, credit and insurance.
- It reduces dependence on moneylenders who charge high interest.
- It promotes Direct Benefit Transfer (DBT) of subsidies into bank accounts.
Pradhan Mantri Jan Dhan Yojana (PMJDY)
The largest financial inclusion scheme in India was launched on 28 August 2014.
- It opens zero-balance bank accounts for all.
- It provides a RuPay debit card and accident insurance cover.
- It set a Guinness World Record for the most accounts opened in a week.
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Steps Taken by RBI and Government
- No-frills accounts (now Basic Savings Bank Deposit Accounts) with no minimum balance.
- Business Correspondent (BC) model to reach remote villages.
- Lead Bank Scheme for district-level coverage.
- Setting up of Payments Banks and Small Finance Banks.
- JAM Trinity: Jan Dhan, Aadhaar and Mobile linkage.
Related Schemes
- PMJJBY - life insurance scheme.
- PMSBY - accident insurance scheme.
- Atal Pension Yojana (APY) - pension for unorganised workers.
- MUDRA Yojana - small loans for micro businesses.
Quick Revision Points
- Financial inclusion = banking access for all at low cost.
- PMJDY launched on 28 August 2014.
- PMJDY gives a RuPay card and zero-balance account.
- JAM Trinity = Jan Dhan + Aadhaar + Mobile.
- No-frills account is now the BSBDA.
- BC model takes banking to villages.
- Insurance schemes: PMJJBY and PMSBY.