Essay --

Merging Bharat with India (Banking the UNBANKED): Introduction India is very well positioned for a new era of growth. It has a young demography, an abundance of entrepreneurial vigour, a highly competitive and agile services sector, significant potential in burgeoning industries and massive untapped consumer demand in its rural populations. The banking industry has also shown tremendous growth in volume and complexity since the advent of 1991 reforms in India. Despite making significant improvements in all the areas relating to financial and economical viability, profitability, governance and competitiveness, there are concerns that banks have not been able to reach and bring vast chunk of the population, especially the people touted to be at the â€Å"bottom of the pyramid† into the fold of basic banking services. This brings us to the much discussed and deliberated topic of financial inclusion. What exactly is Financial Inclusion? Dr K C Chakrabarty, Deputy Governor, Reserve Bank of India defines Financial Inclusion in these words, â€Å"Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of the society at an affordable cost in a fair and transparent manner by mainstream institutional players.† Current Scenario As we have moved forward on the path of reforms, we have moved away from the main objective i.e - social equity. The focus on the aam aadmi is extremely important in our country as he is usually the neglected one. Even after 20 years of banking sector privatisation, today only 35% of the Indian population has formal bank accounts compared to an average of 41% in developing economies. In a country where nearly 70% of the population lives in villages, the numb... ... to be tempered because the financial system can grow only as fast as the rest of our economy. With the present India’s income levels, it is neither doing much worse nor much better than its peers as far as key parameters of financial inclusion are taken into consideration. A cross-country survey done by the World Bank shows that 7% of Indians reported taking a loan from a financial institution in the past year and 11% reported saving at a formal financial institution. These figures were found to be similar to the average of lower middle-income range countries. The percentage of persons taking formal financial loans is roughly the same across the developing countries. The journey could be long and arduous but we have embarked in the right direction. The road will finally lead to a place where Bharat WILL merge and there will be one entity, one nation, one INDIA.