journals, Articles, reports of RBI, reports of NABARD and online resources. C Rangarajan, Report of the committee on Financial Inclusion, ,1- [3]. 18 Nov Home · Special Report · Financial Inclusion. C Rangarajan: The Two Pillars of Financial Inclusion. Banks are in the best position to lead. Rangarajan () defines financial inclusion as “the process of ensuring access of RBI and also taken from various committee reports on financial inclusion.

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The committee on financial inclusion, appointed by the government under my chairmanship, had indicated that at least 50 percent of the financially excluded households must be covered by through rural and semi-urban branches. Access to safe, easy and affordable credit and other financial services by the poor and vulnerable inclusuondisadvantaged areas and lagging sectors is recognized as a precondition rnagarajan accelerating growth and reducing income disparities and poverty.

For instance, Fiancial had a task force based programme for financial inclusion which extended uptillthat vastly differed from the traditional credit based approach of financial inclusion used in India. To me, it depends on how well the BC model takes off. The implementation of the Revival Package would result in the emergence of strong and robust cooperatives with conducive legal and institutional environment for it to prosper.

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Can we achieve that? There are a large number of SHGs in the country which are well established in their savings and credit operations. Such Fiancial may also be recognized as Business Correspondents of banks for providing only savings and remittance services and also act as micro insurance agents. Out of the total There are no clear estimates of the number of people in urban areas with no access to organized financial services.

India committer out on innovation quotient: But the fact remains that despite a very focussed expansion of branches in the rural and semi-urban areas, we have not been able to reach out to the poor farm households and therefore a re-think has started now as to what more can be done.


An important development in the last odd years has been the organisation of Self-Help Groups SHGs or small groups of people who could borrow from the banking system. To some extent, this has happened. National Mission on Financial Inclusion. In some ways fonancial SHGs movement has been a success.


There is a cost involved in this massive exercise of extending financial services to hitherto excluded segments of population.

Thus, apart from the fact that exclusion in general is large, it also varies widely across regions, social groups and asset holdings. Instead of seeing the issue primarily as expanding credit, which puts the cart before the horse, the Committee urged a refocus to seeing it as expanding access to financial servicessuch as.

Rangarajan Committee Report on Financial Inclusion

But it is also seen that it is concentrated much more in the South and therefore there is a regional disparity in terms of the growth of the SHGs. The committee has given a working definition of financial inclusion as. Otherwise too, it is possible because if you look at the numbers, it is doable given that we have 40, rural and semi-urban bank branches.

Video Slideshow Audio Twinterview. As far as the borrower is concerned, he cannot be asked to pay different rate just because the loan passes through a business correspondent. The country has moved on to a higher growth trajectory. Revitalising the Cooperative System.

This, however, is in addition to extending traditional mode of banking by targeted branch expansion in identified districts. Financial inclusion Micro finance C. You are commenting using your Financal account.

These costs may not be very high — they would be much lower than what the banks will have to bear if they were doing the business directly — financiap nevertheless there is an additional cost.

rangarajan committee report on financial inclusion

On an average, there is one PACS for every 6 villages; these societies have a total membership of more than million rural people making it one of the largest rural financial systems in the world. These include not only banking products but also other financial services such as insurance and equity products.


The SHG – Bank Linkage Programme can be regarded as the most potent initiative since Independence for delivering financial services to the poor in a sustainable manner.

The Rangarajan Committee recommended the linking of micro credit with micro-insurance, which is the key element in the financial services package for people at the bottom of the pyramid. Farm households not accessing credit from formal sources as a proportion to total farm households is especially high at One is about who should bear the additional costs of introducing such a new tier of operation.

C Rangarajan: The Two Pillars of Financial Inclusion | Forbes India

The Committee has recommended that adoption of the JLGs concept could be another effective method for purveying credit to mid-segment clients such as small farmers, marginal farmers, tenant farmers, repoort. Instead of seeing the issue primarily as expanding credit, which puts the cart before the horse, the Committee urged a refocus to seeing it as expanding access to financial servicessuch as payments services, savings products, insurance products, and inflation-protected pensions.

Think Live Work Play. The various financial services identified by the Rangarajan Committee include. To achieve this effectively, resource centres can play a vital role. Fill in your details below or click an icon to log in: Sometimes, it is easier to define a phenomenon, by stating what it is not, i.

Leave a Reply Cancel reply Enter your comment here The poorer the group, the greater is the exclusion. Access to finance by the poor and vulnerable groups is a prerequisite for poverty reduction and social cohesion.

In some countries the concept of financial inclusion also includes qualified financial advice. A financially sound cooperative structure can do wonders for financial inclusion given its extensive outreach. Many of the groups are organising themselves into federations and other higher level structures. Development and Technology Funds.