Page 32 - Banking Finance January 2024

ARTICLE

Place of living: The excluded villagers find it very A. Transformation through pro-poor program
difficult to reach the nearest bank due to transportation implementation
cost and wages loss in travelling to the bank.
1. Pradhan Mantri Jan-Dhan Yojana is India's National
Limited literacy: Financial illiteracy and lack of basic Mission for Financial Inclusion to ensure access to
education are prohibiting factors and creating financial services, namely Savings & Deposit Accounts,
hindrance in becoming part of mainstream. They have Remittance, Credit, Insurance, and Pension in an
their own reservations. affordable manner. The scheme targets to provide Basic
Empathy towards informal sector: They develop a like- Banking Accounts with overdraft facility of Rs. 5,000
after six months and RuPay Debit card with inbuilt
mindedness with money lenders which always drives
them to approach them for their credit needs. accident insurance cover of Rs. 1 lakh and RuPay Kisan
Card, micro insurance & pension etc. are also added to
it.
Supply Side Barriers
Legal identity: Inability to provide a legal identity such as As many as 47.8 crore Jan Dhan accounts have been
opened so far, a scheme which was launched in 2014
voter ID, residence proof, birth certificates, etc. often
exclude women and migrants from accessing financial as a national mission for financial inclusion.
(16th Aug, 2023 Economic Times).
services.
2. Aadhaar: The Unique Identification Authority of India
Cost effectiveness: Service & transaction are not cost
is a central government agency. Its objective is to collect
effective.
the biometric and demographic data of residents, store
them in a centralized database, and issue a 12-digit
To overcome the above and to reduce the disparity
unique identity number called Aadhaar to each resident.
Government and non-Government agencies had already
came forward in a positive manner; step by step; so that The Ministry of Consumer Affairs, Food & Public
gradually this huge segment of downtrodden population will Distribution oversees the Aadhaar seeding process of
transform without realizing that they are actually ration cards. Notably 99.70% ration cards were Aadhaar
seeded. As on 28.07.2023 as per department of Financial
transforming. Reason being they resist transformation. Thus,
Services report dt.31.7.2023 out of 164.55 crores CACA
the reforms like Jan Dhan, aadhaar seeding etc. were
injected in society slowly & steadily. Though pandemic was accounts, 141.90 crores accounts were Aadhaar seeded
which come to almost 86.20%
the biggest curse but proved to be a catalyst for adopting
the digitalization among all.
3. Mobile banking: In layman's language, mobile banking
Approaches adopted to break the barriers means banking services being offered with the help of
mobile phones as medium. Mobile banking service is
1. Government initiatives
mainly available in Toll Free numbers over SMS (Short
2. Product led approach Messaging Service) or through GPRS (General Packet
3. Technology base approach Radio Service) or sometimes through USSD
4. Knowledge base approach (Unstructured Supplementary Service Data) or some
mobile Apps. Though during the pandemic penetration
5. Regulator led approach
on mobile banking exorbitantly increased during covid
6. Bank led initiatives but now the people are in habit of using it.

Government initiatives to reach the 4. JAM (Jan Dhan-Aadhaar-Mobile) trinity refers to the
rural mass : government of India initiative to link Jan Dhan accounts,
Mobile numbers and Aadhaar number of Indians to plug
A. Transformation through pro-poor programme
the leakages of government subsidies. With the
implementation
introduction of new technology introduced by National
B. Transformation through cost effective digital technology Payments Corporation of India (NPCI), a person can

28 | 2024 | JANUARY | BANKING FINANCE