The Reserve Bank of India (RBI) has released its five-year (2019-24) National Strategy for Financial Inclusion to include all, particularly the poor and underprivileged class. The strategy aims to provide access to formal financial services in an affordable manner, broadening and deepening financial inclusion and promoting financial literacy and consumer protection.
To achieve the goals in a coordinated and time-bound manner, preparation of a NSFI is essential, the RBI says.
“Keeping in view the global trend, the Reserve Bank of India under the aegis of Financial Inclusion Advisory Committee (FIAC) initiated the process of formulation of National Strategy for Financial Inclusion (NSFI) for the period 2019-2024. Wide ranging discussions were held with all stakeholders. Based on the inputs/feedback received, NSFI has been finalised and approved by the Financial Stability Development Council (FSDC),” it said.
An inclusive financial system is not only pro-growth but also pro-poor with the potential to reduce income inequality and poverty, promote social cohesion and shared economic development, the RBI says.
Wider acceptance and adoption of digital payments will play a key role towards boosting financial inclusion. Along with traditional banking outlets, payments banks, small finance banks, co-operative banks and other non-bank entities such as fertiliser shops, fair price shops, should also promote efficiency and transparency through digital transactions
Currently, the Pradhan Mantri Jan Dhan Yojana (PMJDY) is the government’s financial inclusion programme, applicable to those in the 10-65 age group. Launched in August 2014, it aims to expand and make affordable access to financial services such as insurance, bank accounts, remittances, credit and pensions.
The momentum generated by the government’s PMJDY needs to be taken forward to ensure better delivery and choices available to the end customers with active involvement from the service providers including private sector players.
At present, financial inclusion policies are targeted towards specific sectors such as the small and medium businesses, agriculture, or specific regions such as the aspirational districts. The RBI says that there is a need to develop a sector-specific action plan to monitor targets and review the progress, along with a strong regulatory and legal framework aimed at protecting the interests of the customers, promoting fair practices and curbing market manipulations.
Inputs and suggestions for the Strategy were received from the Government of India, and other financial sector regulators, namely, IRDAI, Securities Exchange Board of India (SEBI), and Pension Fund Regulatory and Development Authority of India (PFRDA).