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there be a toss between financial inclusion and financial literacy or are they both the same sides of the coin. In this new millennium we talk of improving many things. One such step is financial inclusion, i.e delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. This has gained prominence from the start of this millennium. As on March 2010, there were 83,997 branches of scheduled commercial banks (SCBs) out of which 32,289 (37 per cent) branches were in the rural areas (with population up to 9,999), 20,358 branches (24 per cent) in semi-urban areas (with population of from 10,000 to 99,999 people), 46,047 (55 per cent) in urban areas (with population of 100,000 to 9,99,999) and 14,697 (17 per cent) are in metropolitan areas (with population of 1 million and more). The number of branches in semi-urban and rural areas hence constitutes around 61 per cent of the total bank branches. This shows the growth of banking industry during the last decade(200010), in various population segments and gives us not so comforting picture of financial inclusion in the last few years.Also,even though the bank deposits grew by 4.5 times and credits by 6 times in the last decade, the percentage share of deposits and credits in semiurban and rural centres had declined markedly whereas the relative percentage in metro and urban centres had increased substantially(Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks, released by RBI).The above implies, in spite of robust overall growth of banking industry, there seems to be uneven levels of banking penetration in semiurban and rural centres, with more focus taking place in urban centres. Despite the best intentions and the effort from the authorities financial inclusion is not picking up. Some reasons :1. The general apprehension among the people that there can be some harassment or their secrets get shared with official agencies which may lead to some embarrassment in their perception and this has no basis. 2. Illiteracy to understand and comply with the formalities, which keeps people away from formal institutions. 3. The products banks offer do not suit their immediate requirements. What they require is easy loan facilities without much hassles. 4. The timing of the bank also doesn¶t suit them. Most of these people are some small retailers/vendors, labourers, some technically skilled workers like plumbers, electricians, auto mechanics, house maids, drivers, bullock cart owners, rickshaw pullers, iron scrap collectors and dealers etc., and their work starts early in the morning and the bank timings do not at all suit them.
learn and digest information. Traditionally we are more focused on addressing financial inclusion through many supply-side measures so as to help ³connect people´ with the banking system. and then about their children¶s future and their own old age. We should recognize different ways how people receive. the time horizons of households become longer. thus achieving the target of inclusion faster. thus creating qualitative demand. they start thinking about the next five years. thus contributing to the development of the country and the economy. and should useall possible avenues of communication to determine the best way of capturing people¶s attention and interest. What we need is a ³self driver´ concept where the customer can demand the desired services. Last year RBI Governor Dr. rather giving it much importance are focusing more on the supply side. It is axiomatic that when income levels rise.Though many schemes like Banking on a bike. it is important to determine the impact and effectiveness of such programs so as to understand what works and what does not. India has over 600000 villages.e actually a benefit for them. They still store it in their houses. Subbarao and the top management of RBI visited at least one village in every state and most union territories. We should leverage communications and technology in ways to engage and empower people about financial literacy. From thinking about the next agriculture season. but we need to recognize the demand side imperative also ± that financial literacy and education should be developed hand in hand with improving access to financial services. but we. . let us kick start start our endeavour in increasing the financial literacy.The concerned authorities should cross check the significant commitment to financial education by the government. Finally I even feel that. Unless they are aware and confident of the banking system. We should address the challenge and the opportunity of financial literacy head on. These are healthy concerns on which we must capitalize. to achieve the financial inclusion target but still we are not. This will lead to Financial Empowerment which is our actual requirement. They were struck by the rising aspirations and the rising awareness of rural people and even more by how eager they were to learn more about saving and investment. Financial literacy stimulates the demand side i. We need good financial instructors and they should be available for financial advice when the clients are making financial decisions. We should literate them about savings (even if it is very less as rupees 100/week/month) and investment. So.we the students can play a minor role in a major way in literating the illiterate people about savings and investment. But the main factor that I believe is creating hindrance in the way of financial inclusion is financial literacy. they will never go for the facility i. laptop and a data card have been launched to reach the unbanking villages.e literating people what they can and they should demand. Basically a woman in a rural backward area does not know where to store their small savings. due to some of the above reasons.