The Reserve Bank of India (RBI) set up the Khan Commission in 2004 to
look into financial inclusion and the recommendations of the commission
were incorporated into the mid-term review of the policy (2005–06). In
the report RBI exhorted the banks with a view of achieving greater
financial inclusion to make available a basic "no-frills" banking
account. In India, financial inclusion first featured in 2005, when it
was introduced by K C Chakraborthy, the chairman of Indian Bank.
Mangalam Village became the first village in India where all households
were provided banking facilities. Norms were relaxed for people
intending to open accounts with annual deposits of less than Rs. 50,000.
General credit cards (GCCs) were issued to the poor and the
disadvantaged with a view to help them access easy credit. In January
2006, the Reserve Bank permitted commercial banks to make use of the
services of non-governmental o
(NGOs/SHGs), micro-finance institutions, and other civil society
organizations as intermediaries for providing financial and banking
services. These intermediaries could be used as business facilitators or
business correspondents by commercial banks. The bank asked the
commercial banks in different regions to start a 100% financial
inclusion campaign on a pilot basis. As a result of the campaign states
or U.T.s like Pondicherry, Himachal Pradesh and Kerala announced 100%
financial inclusion in all their districts. Reserve Bank of India’s
vision for 2020 is to open nearly 600 million new customers' accounts
and service them through a variety of channels by leveraging on IT.
However, illiteracy and the low income savings and lack of bank branches
in rural areas continue to be a roadblock to financial inclusion in
many states and there is inadequate legal and financial structure.
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