Indian Banking System: A Critical Evaluation of its Performance in Spreading Financial Inclusiveness

Gholam Syedain Khan



Financial Inclusion refers to delivering of financial products and services to the vast section of population ignorant of it at an affordable cost in a fair and transparent term. It helps the rural poor to improve their economic condition and thereby, leading to rural development. This paper attempts to examine the scope and coverage of financial inclusiveness across the globe including India. Thereby, it critically evaluates the performance of the Indian Banking System in spreading financial inclusiveness among the vast economically backward and financially illiterate population. Moreover, this paper tries to design an ideal financial institution that will spread financial inclusiveness to the fullest extent. The analysis is based on secondary data covering the period 2008-09 to 2012-13. The paper concludes that the Indian Banking System cannot able to spread financial inclusiveness to the fullest. The foremost reason for this is their profit-oriented behaviour which ignores the poor section of the society from availing the banking services. However, if an ideal financial institution can be formed, then a day will be realised when each Indian will get a scope to open bank accounts and avail financial products and services.


Financial Inclusiveness, Financial Literacy, Reserve Bank of India, Regional Rural Banks, Scheduled Commercial Banks.

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