REPORT ON FINANCIAL INCLUSION THROUGH DIGITALISATION

NMIMS Global Access School for Continuing Education (NGA-SCE)

Submitted by

ANKIT KHANDELWAL

Registration No: 77117519208

July, 2019

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 ACKNOWLEDGEMENT

Mini Project Report is the one of the important part of MBA program, which has helped

me to gain a lot of experience, which will be beneficial in my succeeding career. For this

with an ineffable sense of gratitude I take this opportunity to express my deep sense of

indebtedness and gratitude to Dr. PRAGYA AWASTHI , Director - Dr.VIRENDRA

SWARUP INSTITUTE OF COMPUTER STUDIES and SHWETA AGNIHOTRI,

Head of Business Administration Department, for their encouragement, support and

guidance in carrying out the project.

I am very much thankful to, my Project Guide SUMEGHA BHATIA, Faculty–MBA

Department for her interest, constructive criticism, persistent encouragement and

untiring guidance throughout the development of the project. It has been my great

privilege to work under her inspiring guidance.

I am also thankful to my parents and my friends for their indelible co-operation for

achieving the goals of this study.

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 Table of Contents
TOPICS PAGE NO.

CHAPTERS

TITLE PAGE
Acknowledgement
CHAPTER 1 INTRODUCTION 4-24
Abstract
About financial inclusion
Definitions
Various schemes
Role of digitalization
Impact of demonetization
Progress and roles of financial institutions
Factors affecting financial inclusions

CHAPTER 2 REVIEW OF LITERATURE 25-32

CHAPTER 3 RESEARCH METHDOLOGY 33-36

CHAPTER 4 OBJECTIVES 37-38

CHAPTER 5 SUGGESTIONS AND RECOMMENDATIONS 39-41

CHAPTER 6 CONCLUSION 42-43

CHAPTER 7 BIBLOGRAPHY 44-45

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 CHAPTER 1

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 ABSTRACT

Monetary Consideration is conveyance of managing an account administrations at a reasonable

expense to the immense areas of impeded and low pay gatherings. The fundamental focal point
of money related incorporation in India is to advance manageable improvement and creating
work in rustic territories for the country populace. Out of 19.9 crore families in India, just 6.82
crore families approach managing an account administrations. To the extent provincial zones are
worried, out of 13.83 crore country family units in India, just 4.16 crore rustic families approach
essential saving money administrations. In regard of urban territories, just 49.52% of urban
family units approach keeping money administrations. More than 41% of grown-up populace in
India does not have financial balance. There are numerous elements influencing access to
monetary administrations by weaker segment of society in India. A few stages have been taken
by the Save Bank of India and the Legislature to convey the fiscally avoided individuals to the
overlay of the formal managing account administrations. The 100 for every penny monetary
incorporation drive is advancing everywhere throughout the nation. The State Level Brokers
Board of trustees (SLBC) has been encouraged to personality at least one regions for 100 for
every penny money related incorporation. Along these lines, far, the SLBC has recognized 431
locale for 100 for each penny money related incorporation. As on 31st Walk 2009, 204 areas in
18 States and 5 Association Regions have detailed having accomplished the objective. Keeping
in view the tremendousness of the errand included, the Panel on Money related Incorporation
prescribed the setting up of a mission mode National Country Budgetary Consideration Plan
(NRFIP) with an objective of giving access to exhaustive monetary administrations to
somewhere around 50 for every penny (55.77 million) of the prohibited provincial families by
2012 and the staying by 2015.

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 ABOUT FINANCIAL INCLUSION

Digitalizations assume an imperative job in monetary consideration in India. Initially it is vital to

comprehend what money related incorporation. Money related incorporation is portrayed as the
strategy for offering saving money and budgetary arrangements and administrations to each
person in the general public with no type of segregation. It fundamentally expects to incorporate
everyone in the general public by giving them essential money related administrations without
taking a gander at a man's pay or reserve funds. Money related incorporation predominantly
centers around giving solid monetary answers for the monetarily underprivileged areas of the
general public without having any out of line treatment. It expects to give monetary
arrangements with no indications of disparity. It is likewise dedicated to being straightforward
while offering money related help with no concealed exchanges or expenses.

Budgetary incorporation needs everyone in the general public to be included and take an interest
in money related administration sensibly. There are numerous poor family units in India that
don't have any entrance to monetary administrations in the nation. They don't know about banks
and their capacities. Regardless of whether they know about banks, a considerable lot of the
destitute individuals don't have the entrance to get administrations from banks.

They may not meet least qualification criteria laid by banks and henceforth, they won't have the
capacity to anchor a bank's administrations. Banks have prerequisites, for example, least salary,

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least FICO rating, age criteria, and least long stretches of work involvement. A bank will give a
store or a credit to a candidate just on the off chance that he or she meets these criteria. A
considerable lot of the destitute individuals might be jobless with no past work record because
of absence of training, absence of assets, absence of cash, and so on.

These financially underprivileged individuals of the general public may likewise not have
legitimate records to give to the banks to confirmation of personality or wage. Each bank has
certain obligatory archives that should be outfitted amid a credit application process or amid a
financial balance creation process. A significant number of these individuals don't know about
the significance of these reports. They additionally don't approach apply for government-
authorized archives.

Money related incorporation plans to wipe out these hindrances and give monetarily evaluated
budgetary administrations to the less blessed segments of the general public so they can be
fiscally autonomous without relying upon philanthropy or different methods for getting finances
that are really not manageable. Money related incorporation additionally means to spread
mindfulness about monetary administrations and budgetary administration among individuals of
the general public. Besides, it needs to create formal and efficient credit roads for the needy
individuals.

For quite a long while, just the center and high classes of the general public acquired formal
kinds of credit. Needy individuals were compelled to depend on sloppy and casual types of
credit. A significant number of them were uneducated and did not have essential information
about fund and consequently, they got swindled by the covetous and rich individuals of the
general public. A few destitute individuals have been misused for a considerable length of time
with regards to monetary help.

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 DEFINATIONS:

 Financial Inclusion is the process of ensuring access to appropriate financial products

and services needed by vulnerable groups such as weaker sections and low income
groups at an affordable cost in a fair and transparent manner by mainstream
Institutional players.(RBI)

 Financial inclusion means that individuals and businesses have access to useful and
affordable financial products and services that meet their needs – transactions, payments,
savings, credit and insurance – delivered in a responsible and sustainable way.

 Financial inclusion may be defined as the process of ensuring access to financial

services and timely and adequate credit where needed by vulnerable groups such
as weaker sections and low income groups at an affordable cost (The Committee
on Financial Inclusion, Chairman: Dr. C. Rangarajan).

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 SCHEMES OF FINANCIAL INCLUSION IN INDIA

The Government of India has been introducing several exclusive schemes for the purpose of
financial inclusion. These schemes intend to provide social security to the less fortunate sections
of the society. After a lot of planning and research by several financial experts and policymakers,
the government launched schemes keeping financial inclusion in mind. These schemes have been
launched over different years. Let us take a list of the financial inclusion schemes in the country:

 Pradhan Mantri Jan Dhan Yojana (PMJDY)

 Atal Pension Yojana (APY)
 Pradhan Mantri Vaya Vandana Yojana
 Stand Up India Scheme
 Pradhan Mantri Mudra Yojana
 Pradhan Mantri Suraksha Bima Yojana (PMSBY)

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 Sukanya Samriddhi Yojana
 Jeevan Suraksha Bandhan Yojana

In the Indian subcontinent, the idea of budgetary incorporation was first acquainted in the
year 2005 by the Reserve Bank of India by discharging the Annual Policy Statement.
Before long, the idea began to spread in all aspects of the country. It was predominantly
acquainted with contact each side of the nation without overlooking any remote zone.
The idea tended to the nonappearance of a formal budgetary framework and saving
money framework for taking into account the financial necessities of the needy
individuals.

In the year 2005, the Khan Committee Report was discharged which for the most part
examined country credit and microfinance. It talked about what number of individuals
in the country are passing up the advantages of an expert and authorized keeping money
framework.

The Khan Committee report laid an accentuation on giving access to basic money related
administrations by helping them to open a financial balance that does not accompany any
decorations or convoluted components. All banks were requested to limit directions with
respect to account creation forms for the financially weaker segments of the general
public. A few banks were requested to cooperate towards 100% money related
incorporation by partaking in crusades begun by the RBI.

The Indian government additionally started the 'Pradhan Mantra Jan Dhan Yojna' with the
sole reason for spurring and urging poor people to open financial balances. This program
focused no less than 75 million people to open financial balances constantly 2015.

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So why it is needed?

A substantial area of the general public still remains unbanked. Unbanked individuals are
individuals who just have the essential exchange financial balances. These are individuals who
have anchored the conventional apparatuses for directing exchanges yet aren't privy enough to
advanced consolidation of the equivalent.

As indicated by the World Bank, around 2 Billion individuals don't utilize formal money related
administrations and over half of grown-ups in the poorest families are unbanked.

This has prompted a considerable measure of monetary precariousness and pauperism among the
general population of lower wage amass who don't approach money related administrations and
items. There are so little banks, particularly in provincial zones, that these unbanked clients
complete exchanges either in real money or checks, making them defenseless against burglary
and misrepresentation.

This is the reason we require Financial Inclusion

ROLE OF DIGITALISATION IN FINANCIAL INCLUSION: These days, Digitalization

has an imperative impact in each expect of our life whether it comes in online business,
administrations and so on. Digitalization has an exceptionally enormous effect on the monetary
incorporation in India.

They can likewise make installments for items and administrations in their private locales
with the assistance of electronic installment wallet frameworks. The Government of India has

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propelled a few electronic wallet frameworks through advanced cell applications, for example,
Bharat Interface for Money (BHIM), Aadhaar Pay, and parcels more.

Electronic wallets or e-wallets allude to wallets that can be utilized with the assistance of
electronic means, for example, cell phones. These wallets supplant physical wallets. A client can
make cashless installments through online and also disconnected means. He or she should
download the e-wallet application on their cell phone and use it to make exchanges. These e-
wallets can be used for versatile energizes, service charge installments, supermarkets, internet
business gateways, and so forth.

Numerous computerized budgetary devices offer alluring offers and rebates when individuals
make utilization of these devices. These are exceptionally useful and new to the financially
underprivileged areas of the general public. They can appreciate offers, get money back
alternatives, and prizes. These impetuses will enable a client to spare a great deal of cash

Some importance of digitalization

• Improve the efficiency of business processes, consistency, and quality worldwide.

• Integrating a conventional digitized records system.
• Improve accessibility and facilitate better information exchange worldwide
• Increase response time and customer service anywhere in the world
•Reduce costs

Money related consideration is exceptionally specific about incorporating ladies in monetary

administration exercises of a family unit. Monetary incorporation trusts that ladies are more fit
for taking care of accounts productively when contrasted with men of a house. Subsequently,
budgetary consideration exercises target ladies by helping them begin participating in monetary

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administration. There are numerous houses where ladies are not allowed to be associated with
overseeing cash. They are controlled by the men of the house and are solicited to take care from
just the local errands.

Budgetary incorporation is additionally influencing numerous ladies to get cell phones for their
very own use. In a few sections of the country, just men had their own cell phones and ladies
needed to rely upon these men. In the course of recent years, ladies have begun to possess cell
phones and have begun to utilize them for work purposes, business purposes, and money related
necessities. A large number of them have begun to use advanced methods of installment and
other money related tasks with the assistance of cell phones. This has improved and enlivened
their exchanges.

By and by, numerous administration tasks are done carefully and clients get receipts for
installments in the advanced shape. In any case, this has not been totally successful in all aspects
of the country. To pull in an ever increasing number of clients for computerized methods of
installment, the legislature is attempting its best to expel or diminish benefit charges that are
required by organizations on the electronic exchanges.

These advanced budgetary applications will help in wiping out debasement separated from
accomplishing monetary consideration. These applications intend to accomplish budgetary
consideration by offering fascinating and alluring rewards for the two clients and dealers.
Clients who make utilization of these cashless installment apparatuses will have the capacity to
appreciate referral extra plans and in the interim, dealers will get cashback rewards and indicates
when they permit clients execute through these cashless frameworks.

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Alongside the administration claimed installment applications, there are numerous private
versatile electronic wallet (e-wallet) frameworks made by privately owned businesses and banks.
The vast majority of these applications permit bank subsidize exchanges. All these e-wallets
empower clients to make installments carefully in an advantageous way. People won't go
anyplace regardless of whether they are out of trade out hand. On the off chance that they have
cash in their electronic wallet, they are sheltered and can do monetary exchanges effectively
without depending on others for cash. The greater parts of these applications are accessible on
Android and iOS Smartphone. There are likewise some applications that are accessible on
telephones that work through Windows.

One of the main e-wallets in India is Paytm. It is accessible on Android, Blackberry, iOS, Ovi,
Windows, and so on. A portion of the other noticeable e-wallet applications incorporate
Freecharge, MobiKwik, Citrus Wallet, Oxigen Wallet, ItzCash, Airtel Money, Axis Bank
Lime, Jio Money, ICICI Pockets, HDFC PayZapp, SBI Buddy, mRupee, Vodafone M-Pesa,
PayMate, PayU cash, Juspay, Ezetap, Citi MasterPass, MomoeXpress, Ola Money, Mswipe,
and so on.

IMPACT OF DEMONITISATION ON FINANCIAL INCLUSION

With the goal of making India totally cashless in a couple of years, the legislature has presented
modest e-wallet alternatives so the less lucky individuals of the country are not prohibited from
going cashless. These e-wallets have territorial dialects separated from English. The client can
choose the dialect that he or she knows and make utilization of the application advantageously. A
portion of these e-wallets enable a client to make installments, as well as empower them to make
subsidize exchanges starting with one financial balance then onto the next.

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With the execution of the demonetization procedure in India in the year 2016, the requirement
for computerized money related administrations has risen. The prohibition on use of the notes of
Rs.500 and Rs.1,000 prompted the expanding interest for elective methods of installment for
merchandise and ventures. Henceforth, the quantity of advanced wallets expanded widely in the
nation. The objective of the Indian government is to make the country cashless and henceforth,
the high number of computerized wallets is fantastically helping the administration in achieving
its objective. Also, there was an ascent in as far as possible for electronic wallets to Rs.20,000.
This is awesome news for the two clients and e-wallet organizations.

Numerous individuals having a place with low-pay bunches additionally began to use electronic
wallet choices as they didn't have some other decision. The facts confirm that a great deal of
them battled at first because of the demonetization procedure. A few white collar class and low-
class individuals were left stranded when the demonetization procedure became effective all of a
sudden. Nonetheless, the presentation of numerous advanced saving money and budgetary
administrations filled in as an extraordinary aid to every single monetary class of the general
public.

A few low-pay individuals, jobless individuals (counting individuals who were ignorant people)
living in both provincial and urban territories began to find out about how to open a ledger, how
to apply for credit, how to utilize innovation for saving money administrations, how to benefit
monetary administrations without remaining in long queues, and how to do exchanges without
conveying trade out hand.

PROGRESS IN FINANCIAL INCLUSION

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Faster implementation of FIPs is seen after 2010-11. Commercial banks opened new rural
branches, increased coverage of villages, set up ATMs and digital kiosks, deployed BCs, opened
no-frills accounts, and provided credit through KCCs and GCCs. The introduction of core
banking technology and proliferation of alternate delivery channels aided the process of
inclusion on a larger scale. The statistics on key banking network give a sense of the pace of
progress of banking outreach as part of FI.

Progress of financial inclusion at a glance

Parameter of financial March March March
inclusion 2016 2017 2018

Number of Bank branches in

33,378 51,830 50,860
villages

Number of Business
34,174 531,229 543,472
Correspondents (BCs)

Number of other forms of

142 3,248 3,761
banking touch points

Total number of banking touch

67,694 586,307 598,093
points

Number of BSBDA (in

73 469 533
millions)

Deposits in BSBDA (Amount

55 636 977
in Rs. billions)

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The biggest change came with the roll out of ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’ in
August 2014. PMJDY has been designed to ensure accelerated access to various financial
services like basic savings bank accounts, affordable, need-based credit, remittances facilities,
and insurance and pension for excluded sections. Such deep penetration at affordable cost can
only be possible with effective use of technology. Hence, the banking ecosystem operating on
core banking mode, and ability of NPCI to scale-up issue of debit cards has enabled effective
implementation of PMJDY. As a result, the number of new savings accounts opened by the
banking system has been phenomenal under the scheme. The progress since its inception is
interesting to observe.

Progress of PMJDY up to 9 May 2018

Number of new
Deposits
savings bank No of debit
accumulated
Group of banks accounts cards issued (in
(in Rs.
opened (in millions)
millions)
millions)

Public sector banks 255.3 652182.50 192.00

Regional rural banks 50.7 137170.30 36.80

Private sector banks 09.9 22681.30 08.20

Total 316.6 812035.90 238.00

ROLE OF FINANCIAL INSTITUTION IN FINANCIAL INCLUSION

In India the term budgetary consideration was utilized without precedent for April 2005 by the
then Governor of RBI: Y Venugopal Reddy. There are a few estimates taken to accomplish more
noteworthy Financial Inclusion, particularly by the Government, World Bank and the Reserve

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Bank of India, for example, encouraging straightforward records and GCCs. Here are a portion
of the activities taken:

Opening BSBD (Basic Savings Bank Deposit) accounts

The Reserve Bank has advised all the banks to open a basic account with facilities such as no
minimum balance, receipt or credit of money through electronic payment channels, ATM
cards facilities, deposit and withdrawal of cash at bank branches as well as the ATM.

Relaxation on know-your-customer (KYC) norms

To make opening of bank accounts easy, especially accounts with low balance such as not
exceeding 50,000 and aggregate credits in the accounts not exceeding rupees 1 lakh a year.
Banks are also allowed to use aadhar card as proof of address and identity.

Domestic Scheduled Commercial Banks (SCBs) are permitted to open branches in Tier-2 to
Tier-6 centers with population under 1 lakh under general permission subject to reporting, to
address the issue of uneven spread of bank branches. In North-eastern states and Sikkim, the
domestic SCBs can open branches without permission from the RBI.

Opening branches in unbanked rural areas has directed banks to allocate at least 25% of their
branches to be opened in Tier-5 and Tier-6 centers during the year.

Licensing of new banks

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The business models aimed at furthering financial inclusion would be looked into closely
in processing applications for bank licensing. The RBI also urged banks to review their
existing objectives and practices in order to align them with the objectives of Financial
Inclusion. It also permitted banks useNGOsandSHGs, microfinance institutions and civil society
organizations as intermediaries to facilitate financial and banking services.

RBI and GoI Initiatives and Policy Measures and Involvement in Financial Inclusion

Reserve Bank of India and Government of India is navigating the path to financial inclusion by
means of policies and supervision. To remove all obstacles and hurdles in the way of financial
inclusion RBI and GoI has taken a lot of initiatives and policy measures These initiatives and
policy measures are:-

No-frills Accounts-People in the financially excluded zone find it quite difficult to meet the
requirements of normal savings accounts. Recognizing this problem, RBI, in the year 2005, took
an initiative and has made it compulsory for the banks to provide no-frills savings accounts
without a minimum balance requirement. The transaction charges are reasonable and small
overdrafts are also allowed. This initiative of RBI proved to be very effective as the banking
system has opened 139 million no frill accounts amounting to Rs.126 billion by March, 2012
under the Financial Inclusion Plan (FIP).

Overdraft facilities in saving Account-Banks are providing overdraft (OD) facility in saving
account and also Small Overdrafts in No-frills accounts. Banks have been advised and directed
to provide small OD in such accounts. Banks had provided 2.7 million ODs amounting to Rs.1.1
billion till March 2012.

Overcoming language barrier-Large sections of the Indian population are not familiar with
English and Hindi, the languages mostly used in bank forms. Banks are therefore required to
provide forms pertaining to account opening disclosure etc. in the regional language as well

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Simplification of Know Your Customer (KYC) Norms and Guidelines-To open a Regular
Account, a customer has to provide documents on (a) Proof of identity, and (b) Proof of address,
as per RBI guidelines. But customers face difficulties in providing the requisite documentation
for opening regular bank accounts. Also, most rural inhabitants do not have any of the identity
documents that are required for account opening and compliance with Know Your Customer
(KYC) norms. For that reason, the account opening process has been simplified for people who
intend to keep balances not exceeding Rs.50,000 and whose total credit in all the accounts taken
together is not expected to exceed Rs.100,000 in a year. Small accounts can now be opened on
the basis of an introduction from another account holder who has satisfied all the KYC norms.

SHG Bank-Linkage Programme-The credit linkage of Self Help Groups (SHG) and Joint
Liability Groups (JLG) by Commercial Banks is one of the major initiatives to bring low income
poor people into the banking stream. The poor people come together and pool the savings of
group and dispense small loans for meeting the individual requirements of members.

Creation of Funds for Financial Inclusion-Financial Inclusion Fund and Financial Inclusion
Technology Development Fund were created by Central Government for meeting the costs of
development, and promotional and technology interventions, A fund of Rs.5,000 crore in
NABARD was also created to enhance its re-finance operations to short term co-operative credit
institutions.

Rural Infrastructure Development-Under Rural Infrastructure Development Fund (RIDF),

NABARD grant loans to State Governments for the creation of rural infrastructure, broadly
under agriculture and related sectors, rural connectivity and social sector. The annual allocation
of funds announced in the Union Budget has gradually increased from Rs. 2,000 crore in 1995-
96 to Rs. 18,000 crore in 2011-12.The aggregate allocations have reached Rs. 1,52,500 crore. In
the Budget speech 2012-13, allocation of Rs. 20,000 crore has been made.

Use and promotion of ICT in Banking-Financial inclusion approach basically focuses on the
exercise of ICT (Information and Communication Technology) to expand access to banking
facilities and services. The Government and the RBI supporting and promoting commercial and
cooperatives banks to offer banking facilities to the society by using modern technology i.e.

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ATM, micro-ATMs, mobile banking and business correspondents, E-banking, smart cards,
Aadhaar Enabled Payment Systems (AEPS) etc.

FACTORS AFFECTING ACCESS TO FINANCIAL SERVICES

Some of the major factors affecting access to financial services are:-

 Psychological and cultural barriers- Many people willingly excluded themselves due to
psychological barriers and they think that they are excluded from accessing financial services. A
very general psychological barrier can be easily noticed when older people find it difficult to use
ATMs which is the most convenient form of banking today.

 Legal identity-Lack of legal identity like voter Id, driving license, birth certificates,
employment identity card etc. is also a major factor affecting access to financial services.

 Level of income -Low income people generally have the attitude of thinking that banks are
only for the rich people.

 Various terms and conditions-Since banks are profit making organizations they discourage the
non-profitable customers (poor) by the minimum balance requirements. While getting loans or at
the time of opening accounts, banks place many conditions, so the uneducated and poor people
find it very difficult to access financial services.

 Structural procedural formalities-It is very difficult for people to read terms and conditions
and account-filling forms due to lack of basic education.

Limited literacy- Lack of financial literacy and basic education prevent people to have access to
financial services. Financial literacy involves encouraging people to use various financial
products through various economic agents like NGOs (Non-Profit Organizations), MFIs and

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Business Correspondents etc. People do not know the importance of various financial products
like insurance, finance bank accounts, cheque facility etc.

Place of living-Commercial banks operate only in profitable areas. Banks set their branches and
offices only in the commercial areas. Therefore, people living in underdeveloped areas find it
very difficult to go for any bank transaction in other areas again and again. Hence, they do not go
for any banking services.

 Social security payments-In those countries, where the social security payment system is not
linked to the banking system, banking exclusion has been higher.

 Types of occupation-Many banks have not developed the capacity to evaluate loan application
of small borrowers and unorganized enterprises and hence tend to deny such loan requests.

 Attractiveness of the product-Both the financial services/products (savings accounts, credit

products, payment services and insurance) and how their availability is marketed are crucial in
financial inclusion.

Research Problem

This research paper is an attempt to throw light upon the reasons for opening a bank account, the
level of awareness about financial services and the extent to which these services are used.
Opening of bank account is not enough for achieving financial inclusion. The level of awareness
about different financial services and its regular use by the targeted customer is what will make
the success of the financial inclusion drive. The research will try to find out the obstacles in
achieving complete financial inclusion.

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 OBJECTIVE OF THE STUDY

By understanding the way Technology is entering into the banking system in India by
design through the regulatory body, the researchers have taken the following
objectives for the study:

To understand the importance of Digital Banking in Indian Banking System.

 To understand the various factors affecting financial services in India

 To Study the Financial inclusion aims to bring in digital financial solutions for the
economically underprivileged people of the nation.

 To understand the Extent of financial inclusion in India.

 To create awareness among people about mobile banking.

Scope of the study

The Financial Inclusion is defined as the process of ensuring access to financial services
and timely and adequate credit where needed by vulnerable groups such as the weaker
sections and low income groups at an affordable cost.
If customer is financially educated, he will make better financial choices, for example
what kind of financial products can full his individual needs? It will help in improving
overall growth of the country. Access to financial services at an affordable cost will
improve life of the poor, Rangarajan Committee report (2008).

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 Financial inclusion is a long term strategy, but to achieve its objectives, there is following
factors:
 It should provide access to basic financial services like banking etc.
 The usage of financial services should be address needs of the poor.
 The financial product should be affordable.
 Quality of product and services must be enhanced.
Recent development has shown that technology plays an important role in improving
financial inclusion because of the following reasons:
 It helps to reduce cost of the product.
 Reduces transaction cost.
 Improves quality of the product.
 Helps in increasing choices and exibility to customer

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 CHAPTER 2

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 LITERATURE REVIEW

Swapan Kumar Roy (2012) made an examination titled, "Money related Inclusion in India: An
Overview", tells that the managing an account industry in India has experienced sensational
changes. Prior the banks focused on the rich clients. Subsequently, the less wealthy or all that
really matters clients of the pyramid were disregarded. They had a place with low-salary
gathering and needed to take resort of moneylenders or casual banks for taking
development/credit at over the top rate of premium. This circumstance can't elevate the needy
individuals and makes them desperate over the long haul. Access to back, particularly by poor
people and defenseless gatherings, is a basic essential for work, monetary development,
neediness lightening and social upliftment. Here falsehoods the significance of money related
incorporation. Money related incorporation or comprehensive financing is the conveyance of
monetary administrations at moderate expenses to segments of hindered and low-wage
fragments of the general public. The Government of India has taken various activities with the
goal that the banks can serve the poor in an issue free way. In this article, an endeavor has been
made to feature the upsides and downsides of monetary consideration in India.

Usha Thorat (2006) in his discourse on, "Money related Inclusion for Sustainable Development:
Role of IT and Intermediaries", tells that budgetary consideration requires generous endeavors in
understanding the necessities of the client directing, monetary proficiency, screening and
observing. In creating nations, the additional measurement, and the principle distinction is that
the focal point of money related incorporation is on advancing practical improvement and
producing work for a dominant part of the populace particularly in the rustic territories.

Anupama Sharma and Sumita Kukreja, (2013) in their examination titled, "An Analytical
Study: Relevance of Financial Inclusion for Developing Nations", for creating countries the
time is of comprehensive development and the key for comprehensive development is money
related incorporation. Money related consideration or comprehensive financing is the
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 conveyance of

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budgetary administrations, at moderate expenses, to areas of impeded and low pay fragments of
society. There have been numerous imposing difficulties in money related consideration zone,
for example, bringing the hole between the areas of society that are fiscally avoided inside the
ambit of the formal budgetary framework, giving monetary proficiency and reinforcing
acknowledge conveyance components in order to extemporized the budgetary financial
development. A country can develop monetarily and socially if its weaker area can end up being
budgetary free. The paper features the essential highlights of money related incorporation, and
its

requirement for social and financial advancement of the general public. The investigation
centers around the job of money related incorporation, in reinforcing the India's situation in
connection to different nations economy. For investigating such certainties information for the
examination has been assembled through auxiliary sources including report of RBI, NABARD,
books on money related consideration and different articles composed by prominent writers. In
the wake of breaking down the raw numbers it tends to be presumed that without a doubt money
related incorporation is assuming a synergist job for the monetary and social improvement of
society yet at the same time there is a lengthy, difficult experience ahead to accomplish the
coveted results.

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K.S. Srinivasa Rao and Chowdari Prasad (2006) studied on the sustainability of Foreign Banks
operating in India in-spite of their Technology advantage.

Ankit Gupta (2010) studied on the Mobile Banking adoption in rural India as case study.

Varalakshmi A, Chowdari Prasad and K.S. Srinivasa Rao (2013) created awareness on Lean and
Green Banking and suggested how technology in Banking can reduce wastage.

AnshuTyagi and Smitha Chitranshi (2015) have studied the relationship between Electronic
Banking and Customer Satisfaction in a select Indian bank. Davinder Kumar and Bhubaneswar
Sharma (2015) have discussed about how virtual circuits will become permanent in making M-
Banking applications a success. They focussed on the issues of cost effective planning of
network and location management between ATMs and WATMs (White Labelled ATMs).

GomathyThyagarajan (2015) has studied more on issues related to Mobile Banking in India.
MuhammedJuman BK and J. Christopher (2015) have indicated that e-Banking in India is still in
evolution stage eventhough Government of India and RBI have taken several
initiatives.KamaleswarBoro (2015) has studied on the prospects and challenges of technological

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innovations in Indian banks viz. ATMs, Credit Cards, Debit Cards, Internet Banking, Mobile
Banking, ECS, RTGS, and Mobile Wallet in North Eastern India.

SNagaraju and LathaParthiban (2015) have discussed about the advantages of Cloud
Technologies and mentioned about issues like data security and privacy. They have presented a
multi-factor authentication scheme using biometric finger prints as a key parameter for online
banking systems.

ThankomArun and Rajalaxmi Kamath (2015) have opined that Financial Inclusion is the key
enabler for development. The macro data analysed by them through round table discussions,
gave different regional perspectives on the policies and practices of financial inclusion in India,
South Africa and Australia.

V.V aralakshmi (2015) has described about the attacks on PIN entry and secure ATM
transaction methods used to reduce physical and electronic thefts in ATMs.Y V Rao and
Srinivasa Rao Budde (2015) have studied on the development in Information Technology which
enables banks in making value-added services to be more effective in satisfying customer needs
by adopting innovative solutions in banking services. R. Srinivasan and M. Subramanian (2015)
have demystified about Payment Banks and how they are going to support in Digital Banking
revolution.

Aboagye Michael Osei et al., (2016) have suggested through a survey findings on how to
redefine the SERV-QUIL dimensions and constructs while applying to Electronic Banking.

Mandira Sarma and Jesim Paise (2008) suggested that the issue of nancial inclusion is a
development policy priority in many countries. Using the index of financial inclusion dev.

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in levels of human development and nancial inclusion in a country move closely with each other,
although a few exceptions exist. Among socio-economic factors, as expected, income is
positively associated with the level of nancial inclusion. Further physical and electronic
connectivity and information availability, indicated by road network, telephone and internet
usage also play positive role in enhancing financial inclusion.

Charkrabortys (2009) focused on technology, nancial inclusion and the role of banks showed
that technology can operate on any platform. However, the technology solution to the business
needs should be user-friendly without much third-party or information technology vendor
intervention or support requirement for operating the same. This study banks need to redesign
their business strategies to incorporate specic plans to promote nancial inclusion of low-income
groups, treating it as both a business opportunity as well social responsibility.

Sangwan (2007) studied nancial inclusion and self-help groups and found that over the last 15
years; India has witnessed unprecedented growth in nancial services unfolded by liberalization
and the globalization of nancial services due to the adoption of information technology and the
unlocking of the regulatory framework. The study concludes that this positive development,
there is evidence that the formal nancial sector still excludes a large section of the population.

Joseph Massey (2010) said that role of nancial institutions in a developing country is vital in
promoting nancial inclusion. The efforts of the government to promote nancial inclusion and
deepening can be further enhanced by the pro-activeness on the part of capital market players
including financial institutions. Financial institutions have a very crucial and a wider role to play
in fostering nancial inclusion. National and international forum have recognized this and efforts
are seen on domestic and global levels to encourage the nancial institutions to take up larger
responsibilities in including the financially excluded lot.

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(D.MAHALAKSHMI 2007) said about the aims to assess the current opportunity and challenges
of financial inclusion on the development of Indian economy by analyzed the state bank group
and private sector banks. The Bank growth rate in terms of number of bank branches, offsite and
onsite ATM, usage of debit card and credit cards were analyzed. It was observed from the study
that the usages of cards and other bank services has increased tremendously throughout the study
period and banks focused more on rural and semi-urban areas, it is disheartening to note that the
number of people with access to the products and services offered by the banking system
continues to be very limited, even years after introduction of inclusive banking initiatives in the
country, like cooperative movement, nationalization of banks, creation of regional rural banks,
etc. also focuses in the challenges and opportunities.

Dr. Supravat Bagli (2012) said that Recently India has taken several steps towards financial
inclusion for achieving faster inclusive growth. This study seeks to examine the achievement of
the Indian states regarding the financial inclusion. Applying the methodology of Rotated
Principal Component Analysis this study has computed a comprehensive measure of financial
inclusion for each state. For this analysis ten indicators of financial Inclusion have been
considered. This study has used the data published by the Reserve Bank of India (RBI) and the
Government of India. Ranks of the states in accordance with the Composite score show that
although the state of Goa is the best, most of the states in southern region have performed better
in terms of financial inclusion. However, the levels of financial inclusion of the states in India
have a low mean and high disparity. This study has revealed a strong positive association
between the human development and the financial inclusion of the states in India

Neha Dangi(2013) said that Strong and vigorous financial institutions are the pillars of
economic growth, progress and success of modern economies. Lack of accessible, affordable and
appropriate financial services has always been a global problem. Therefore, the significance of
an inclusive financial system is widely accepted not only in India, but has become a policy
priority in many countries. Financial access can really boost the financial condition and
standards
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of life of the poor and the disadvantaged. So, RBI has been constantly encouraging the banking
sector to develop the banking network both through setting up of new branches, installation of
new ATMs, implementation of EBT and also through BC model by leveraging upon the
information and communication technology (ICT).This article focuses on the RBI and GoI
initiatives and policy measures, current status and future prospects of financial inclusion in India
on the basis of facts and data provided by various secondary sources. It is concluded that
financial inclusion shows positive and valuable changes because of change in strength and
technological changes. Therefore, adequate provisions should be inherent in the business model
to ensure that the poor are not driven away from banking. This requires training the banks
forefront staff and managers as well as business correspondents on the human side of banking.

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 CHAPTER 3

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 METHODOLOGY OF THE STUDY

After doing the Literature survey, an interest was developed to work on the status of Digital
Banking with reference to Indian Banks. Type of Research is of Exploratory mainly as the
concept is still at the evolving stage in India. On several parameters of Financial and
Technological strengths of Banks, the research is of descriptive nature. The work is more on
Secondary Data which was collected from various sources of Bank Websites, Newspaper
Advertisements, and Information through Press Releases. The objectives of the Research were
verified through the information available but not tested by any hypothesis.

MEANING OF RESEARCH

Research is a matter of gathering information from varying sources usually in relation to a

specific topic and for a specific purpose. The definition of research includes any gathering
of data, information and facts for the advancement of knowledge.

Type of Question:

The types of questions asked during the study are straight forward and limited probing.

Type of Questionnaire:

The type of questionnaire used during the study is structured and formalized.

Type of Analysis:

The type of analysis carried out during the study is statistical analysis

Sources of Information:

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 Primary Source: The Primary source of collecting data for research is: Questionnaire
filled by the public.

Secondary Sources: In this study the secondary data is collected from the following sources:

 Bank website

 Journals

 Research reports

 Newspaper

 Books

Primary Data Collection:

Research Technique: In this study the survey method is used as a research technique. This
method helps to obtain right information from respondents.

Contact Method: In this study is taken as a tool for contact method in which the
questionnaires are filled by Jaipur locals lives in different location.

Sampling Plan:

Population: For the research the population of interest is the Jaipur locals.

Sample Size: The sample size covered during the research is of 200.

Sample Element: The sample element of the research is local people.

Sample Duration: The sample duration was taken in MAY and JUNE

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2019.

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Sample Extent: The sampling procedure followed is random sampling.

Research Instrument: In this study the research instrument is Questionnaire. It consists of a

set of questions presented to respondents. The questionnaire is structured with combinations of
various close and open ended questions. Close ended questions already have the possible
answers and the open-ended questions allow the respondents to answer in their own words

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 CHAPTER 4

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 OBJECTIVE OF THE STUDY

By understanding the way Technology is entering into the banking system in India by
design through the regulatory body, the researchers have taken the following objectives
for the study:

1. To understand the importance of Digital Banking in Indian Banking System.

2. To understand the various factors affecting financial services in India

3. To Study the Financial inclusion aims to bring in digital financial solutions for the
economically underprivileged people of the nation.

4. To understand the Extent of financial inclusion in India.

5. To create awareness among people about mobile banking.

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 CHAPTER 5

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 SUGGESTION/RECOMMENDATIONS

 More use of Mobile banking in rural areas: Banks will have to reach out through a
variety of devices such as mobile banking, satellite offices, weekly banking, rural
ATMs. Since mobiles has penetrated to greater extent they can used for sending
information concerning account balances, attractive schemes, loan and interest to be
paid, etc for account holders and even receipt of salaries, pensions and payments for
utilities, information regarding loans, insurance and micro finance products.

 Ensure Banks to Grant Credit Facilities: As already RBI has taken the initiative in
granting small credit facilities in form of Over Drafts, GCC/KCC, etc, they can ensure
banks to grant such small credit facilities and the credit amount can be improved
based on successful repayment of credit obtained.

 Innovative Strategies: Basic banking itself needs to be supported by innovative

strategies, in order to improve the reach and reduce the operating cost of the banks.
Infrastructure sharing amongst banks and other organizations will help in lowering the in
commission cost and thus the cost benefit can be transferred to customers. Greater use of
technology should be made by the banks to improve their reach, speed of processing, as
well as to cut down the operating cost.

 Increase Financial Literacy: Banks should arrange and provide technical advice for
entrepreneurs. They will have to tone up their risk assessment and risk administration
capacities, and provide for these facilities. Banks should give free financial counsel to
low-income households.

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  . Basic Banking: The banks need to assume a considerate approach towards their
new clients, to remove their qualms and disbeliefs. It is necessary that the basic
banking should be inclusive in scope. All banks should allow no frill accounts i.e.
savings accounts which can be opened with a nominal amount of Rs.5/- or even with
zero balance.

 Financial Inclusion as a Part of Course Curriculum in High Schools: Financial

Inclusion should be imbibed into the course prospectus in high schools so that the
students would understand the importance of financial inclusion for inclusive growth in
the economy which in turn would motivate them to automatically participate in the
financial system.

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 CHAPTER 6

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 Conclusion

This research study showed that irrespective of literacy level and the income level every
household is having a bank account. The major loophole is that the people are not aware about
various financial services and its benefits. Even the awareness about the customized services for
the particular sector or segment of people is very low among the rural households. The
government and the banks should collectively make efforts to organize More and more about the
financial awareness program. The financial literacy centers should be set up in rural areas to
educate the rural people about the financial products and services. Financial literacy among
household scan play a major role in the success of the financial inclusion drive. The majority of
people generally fear to enter banks and fulfill their financial requirement through money lenders
which charges a higher rate of interest.
Government of India and Reserve Bank of India should make efforts to reach the rural
population through the Expansion of banking services. The introduction of Jan Dhan Schemes,
Atal Pension Scheme, Prime Minister Insurance Schemes are great idea. There is a need to
motivate people to save and that could be possible only when their source of earning is
improved. Opening of account will not itself provide beneficial for banks as the Earning of bank
will improve when the people save money and put it in banks.

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 CHAPTER 7

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 BIBLOGRAPHY

 https://www.oecd.org/finance/financial-education/48303408.pdf

 https://www.investopedia.com/terms/f/financial-inclusion.asp

 https://en.wikipedia.org/wiki/Financial_inclusion

 https://www.worldbank.org/en/topic/financialinclusion

 https://www.bankbazaar.com/personal-loan/financial-inclusion.html

 https://www.imf.org/en/News/Articles/2016/09/20/sp092016-Financial-Inclusion-
Bridging-Economic-Opportunities-and-Outcomes

 https://www.bankbazaar.com/personal-loan/financial-inclusion.html

 https://www.sciencedirect.com/science/article/pii/S0186104217300104

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