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    The document discusses the evolution of financial inclusion in India. It provides background on financial inclusion, including defining it as providing basic banking services at affordable costs to disadvantaged groups. It also discusses the government and corporate vision for financial inclusion in India, aiming to open 600 million new customer accounts by 2020. It then discusses initiatives around microfinance, microinsurance, and partnerships between different organizations to further financial inclusion through new technologies and models. The document raises questions around whether financial inclusion efforts are motivated by altruism or profitability and discusses new financial instruments and innovation in risk management in the Indian context.

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    The document discusses the evolution of financial inclusion in India. It provides background on financial inclusion, including defining it as providing basic banking services at affordable costs to disadvantaged groups. It also discusses the government and corporate vision for financial inclusion in India, aiming to open 600 million new customer accounts by 2020. It then discusses initiatives around microfinance, microinsurance, and partnerships between different organizations to further financial inclusion through new technologies and models. The document raises questions around whether financial inclusion efforts are motivated by altruism or profitability and discusses new financial instruments and innovation in risk management in the Indian context.

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    The document discusses the evolution of financial inclusion in India. It provides background on financial inclusion, including defining it as providing basic banking services at affordable costs to disadvantaged groups. It also discusses the government and corporate vision for financial inclusion in India, aiming to open 600 million new customer accounts by 2020. It then discusses initiatives around microfinance, microinsurance, and partnerships between different organizations to further financial inclusion through new technologies and models. The document raises questions around whether financial inclusion efforts are motivated by altruism or profitability and discusses new financial instruments and innovation in risk management in the Indian context.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    19 views3 pages

    Topics Outline

    Uploaded by

    aakokate
    The document discusses the evolution of financial inclusion in India. It provides background on financial inclusion, including defining it as providing basic banking services at affordable costs to disadvantaged groups. It also discusses the government and corporate vision for financial inclusion in India, aiming to open 600 million new customer accounts by 2020. It then discusses initiatives around microfinance, microinsurance, and partnerships between different organizations to further financial inclusion through new technologies and models. The document raises questions around whether financial inclusion efforts are motivated by altruism or profitability and discusses new financial instruments and innovation in risk management in the Indian context.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Evolution of Financial Inclusion in India

    Financial Inclusion is delivery of basic banking services at an affordable


    cost to the vast sections of disadvantaged and low income groups. It
    includes access to formal financial system such as financial institutions,
    markets and instruments, like savings, loans, remittances and insurance
    services, at affordable prices. Financial Inclusion is the next big step for
    the people at bottom of pyramid to move step further ahead in getting
    access to financial services. The major three aspects of financial
    inclusion are to give people- access to financial markets, access to credit
    markets and literacy on financial matters

    Financial Inclusion – Government’s & Corporate Vision

    RBI said that its vision for 2020 is, “to open 600 million new customers'
    accounts and service them.” Inadequate legal and financial structures
    add to the bottlenecks already present and render the financially
    excluded sections of society as particularly vulnerable to dubious ‘fly-by-
    night’ operators. The question thus remains as to how the Government
    &Corporate plans to act upon its vision. What steps have they taken to
    ensure financial inclusion without compromising on the norms of
    financial integrity, prudence and reliability? What model has been
    followed to facilitate the dream of low-cost inclusion and is it
    sustainable? Moreover, is the idea of inclusion with regulation a
    viable option for India?
    Microfinance and Micro insurance

    Banking and financial services are no longer limited to an elite few. In


    fact, the financial world would do good to realize that the future lies in
    the proverbial “bottom of the pyramid”. Banking the unbanked is fast
    becoming a priority task for these firms. In fact, microfinance is a
    movement that envisions a world free of poverty, where even low
    income households have access to a range of high quality financial
    services to finance their income producing activities. Of course, these
    services are not limited to credit alone- they include savings, insurance
    and money transfers.

    Initiatives & Innovation in Financial Inclusion

    Formal financial institutions such as banks, insurance companies,


    mutual funds, and pension companies will have to join hands with small
    NGO-MFIs, larger NBFC- MFIs, Agribusiness industry and technology &
    Telecomm providers to enable inclusion. The role of IT and other
    technology enablers like UID, Mobile Service providers will play
    important role in the years to come.

    Financial Inclusion: Altruism or Profitability

    So many questions, so many doubts, are they real or just criticism? Since
    the beginning, the motives of the financial inclusion institutions are
    questioned. With the recent uproar regarding IPOs, Role of Venture
    Capitalists & Private Equity, it remains to be seen where the Micro
    financing/Micro insurance industry is heading to. The govt. regulatory
    bodies and the corporate bodies need to ensure financial access is
    reached to the needy as promised. Finally, the big question is- Financial
    inclusion is a humane gesture or just another money making business?”
    New Age Financial Instruments – India Perspective

    Indian economy is opening up very fast and so is the market for new financial
    instruments like currency futures market, bond market, catastrophe financing,
    exotics derivatives and lots more. All these new age financial instruments are
    opening new market for the upcoming surge in the Indian Economy. Although
    securitization and derivatives have been there worldwide but they are yet to
    pick in the Indian market to a sustainable scale.

    Innovation in Risk Management

    Several organizations had used a crisis or external threat as a compelling


    imperative to drive people to innovate and take well-judged risks. In the
    absence of this ‘burning platform’, the need was recognized to create an
    imperative to stimulate innovative thinking.

    Risk Management is as an effective method for minimizing the adverse effects


    of risk and maximizing the benefits of incurring the risk. With new ways to
    innovate, comes the inherent risk which needs to be managed, making the role
    of risk management all the more important. This requires a lot of innovation in
    the field of risk management as well.

    Financial Innovation: necessary evil?

    Financial innovation is a broad term that is used to describe the genesis of


    creative approaches to suit various financial circumstances. With the recent
    financial crisis, severe criticism has emerged for financial innovation. Having
    said that, there’s another school of thought which says that innovation is the
    lifeline of any progressive system. But the very idea of financial innovation, by
    the virtue of it being new and untested, is predictably dangerous. So what is
    the solution for this dilemma? Is there an end to this never ending cycle?

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