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Financial Inclusion and 73rd AGM of Indian Banking Association


India is a geographically and demographically diverse country and the major criterion for economic growth is the financial inclusion of its citizenry. This is the prime step towards alleviation of poverty, betterment of the poor, and overall welfare of all the citizens of the country.


Financial Inclusion from eyes of an Indian

  • The term Financial Inclusion may be defined as the process of facilitation of access to financial services and credit services to the vulnerable sections of society like economically weaker sections, socially backward communities, etc. if needed.

  • In the decades gone by, the Indian government in collaboration with civil society and regulatory bodies has been working hard towards financial inclusion of the vulnerable classes at the grassroots level which has reinforced the financial access to these communities.

  • However, a large section of the Indian population still have little or no access to such services and there are several key areas on which government needs to lay emphasis.

· Some of the important government initiatives towards financial inclusion can be listed as follows

JAM Trinity (A linkage of Jan Dhan Yojana, Adhaar and Mobile Number)

  • Through the combination of these three initiatives, the government intends to use these three methods of identification so as to facilitate Direct Bank Transfer (DBT) of subsidy to the poor population.

  • If implemented in the right way, this will remove intermediaries, minimize corruption, prevent exploitation of vulnerable sections and extend financial inclusion among the needy population.

Push for Banking Services in Rural Areas

  • The Reserve Bank of India (RBI) in collaboration with National bank for Agriculture and Rural Development (NABARD) have launched several initiatives to promote financial inclusion especially in rural areas.

  • The initiatives from this collaboration include issuance of Kisan Credit Cards (KCC), Linking of Self-Help Groups (SHGs) with banks, Increasing number of ATMs, the opening of branches in geographically backward areas, etc.

Project Financial Literacy

  • The Reserve Bank of India recently launched this initiative with the objective of promoting banking and finance related awareness to target groups like backward classes, rural households, school going children, urban poor, senior citizens, defense personnel etc.

Pocket Money Initiative

  • A brainchild of Securities and Exchange Board of India (SEBI) and National Institute of Securities Markets (NISM), this initiative has been launched with an aim to help school-going students to understand the value of money, the significance of saving money, investing, and financial planning.

Systems under NPCI

  • Realizing the importance of Financial Inclusion, National Payments Corporation of India, the umbrella body for retail payments and settlements in India, has initiated several programs towards increasing financial inclusion.

  • UPI has made payments simpler and more secure and has made the reach of these services even wider.

  • Adhaar-enabled Payment System (AePS) has facilitated banking services to poor as they can avail services anytime with their finger prints at Micro ATMs.

  • With the help of NPCI, the government has been able to facilitate Direct Bank Transfer (DBT) of subsidies to poor people.


About Indian Banks’ Association


  • Popularly known as the IBA, Indian Banks' Association which is based in Mumbai was established in 1946 as a representative body of management of banking in India.

  • The aim behind the establishment of IBA was to develop, coordinate and strengthen Indian Banking System and assist member banks in numerous ways so that inclusive growth is achieved.

  • Starting off with 22 member banks in 1946, IBA represents 237 banks in India, today.

  • Recently, the Managing Committee of the Indian Banks’ Association elected Rajkiran Rai G., the CEO and MD of Union Bank of India as the Chairman of the Association.

  • The EASE (Enhanced Access and Service Excellence) Reforms Agenda which was launched in Jan 2018 was commissioned by IBA.

  • Recently, IBA concluded its 73rd Annual General Meeting through video conferencing due to the outbreak of the COVID-19 Pandemic where the Finance Minister of India, Smt. Nirmala Sitharaman, suggested banks to bring new reforms and implement the existing ones in a timely manner.


Highlights from IBA’s 73rd Annual General Meeting

Linkage of Adhaar with Bank Accounts

Adhaar-seeded Bank Accounts are essential for DBT of subsidy. In the meeting, it was recommended that the banks shouldn't leave any customer’s bank account from being linked with the customer’s Aadhaar Number by March 31st, 2021 so that duplication of bank accounts is halted.

Widening the Financial Inclusion:

  • In the meeting, it was stated that even though there are over 42 crore Jan Dhan Accounts, it is still not enough for financial inclusion goals so banks must strive hard to extend banking service penetration into rural India.

  • The banks were asked to promote the use of RuPay cards as their use benefits the nation directly.

  • RuPay cards were launched by NPCI as the first-of-its-kind indigenous debit and credit card payment network of India and have gone global today.

Bank Mergers

  • In the meeting, it was stressed that India still needs large banks like SBI so that large projects can be financed easily.

  • The Amalgamation must not just remain an exercise and should now become a mechanism of growth so that every finance need from every other sector can be fulfilled.

  • India currently has 500-600 banks in total as compared to the USA which has 26000 banks with one-fourth of population serve.


  • The lending of Money was among the prime topics of discussion in the meeting and banks were told to give-out as much loans as they can and show leniency towards the people who are in need of them.

  • Since the economy is facing roadblocks at the present time, the banks need to make robust risk management mechanisms instead of avoiding lending, which is their principal business.

Prime Focus on Digitization

  • Digitization of the Economy has recently been escalated under 'Digital India' Initiative.

  • It was recommended that the Unified Payments Interface (UPI) should be encouraged in every bank.

  • UPI is a unified one-stop-shop platform that merges all the bank accounts and allows a person to avail multiple services of multiple accounts on a single mobile application.



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