Financial inclusion in India is still a work in progress even as substantial gains has been made in this direction in the last two and a half years, Union Finance Minster Arun Jaitley said today.
“It (financial inclusion) is still a work in progress,” Jaitley said during a panel discussion on ‘Financial Inclusion Not Exclusion: Managing De-Risking’ being held on the sidelines of the ongoing annual fall meeting of the International Monetary Fund and the World Bank.
India’s successful efforts in this regard, particularly the Jandhan Yojana came in for special praise by the US Treasury Secretary Jacob Lew and the World Bank President Jim Young Kim during the meeting.
“In India last year, millions of people signed up for banking through technology which was unthinkable till a few years ago,” Lew said.
“What is going on in India is stunning. It is fantastic. Literally billions of dollars is being saved,” the World Bank President said referring to the steps being undertaken by India with regard to financial inclusion.
“I keep asking developing countries have they seen what India has done with the Unique Identity System,” Kim said.
After coming to power in May 2014, the Modi Government has tried to address the challenge of financial inclusion in different ways, Jaitley said.
“We have been able to connect 240 million people in the banking system,” he said referring to the Jandhan Yojana, which was taken under a mission mode.
This has helped in bridging the gap in bringing the people under the banking system net.
Noting that 80 per cent of these bank accounts had no money, Jaitley said the government met this challenge by deciding to transfer payments to these bank accounts from the various social welfare measures, subsidy scheme and poverty alleviation programmes.
“As a result, these bank accounts are now functional into a cash balance system. All these bank accounts now have a debit card. India’s Unique Identity Card – or biometrics card – as praised by Kim is another major success story for India,” Jaitley said.
Biometric identity has covered about a billion people already.
Direct transfer linked with the Unique Identity Card, he said, has resulted in a huge amount of substantial savings, which is used for the same section of the society.
As part of its financial inclusion initiative, the government also has been giving huge amount of financial assistance to entrepreneurs.
The number so far is 34 million people, of which 70 per cent belong to socially disadvantaged sections and women entrepreneurs.
Financial inclusion is not only pro-growth, but is also pro-poverty, said Queen Maxima of the Netherlands, who is also the UN Secretary-General’s Special Advocate for Inclusive Finance for Development.
“Access is just the first step. Having a banking account is not enough. Now there is need to talking about customers’ interest,” she added.