Financial Inclusion

Increasing fi nancial frauds and scams expose the vulnerabilities of the population subgroup which is included in the fi nancial system. An approach of considering educated and economically better-off sections not at the forefront while designing policies and programmes aimed at strengthening fi nancial literacy and improving fi nancial inclusion thus mandates a revisit.

The collapse of the Punjab and Maharashtra Cooperative Bank in 2019 raised questions about the dependability of the urban cooperative banking system in India. Started as a movement to address issues of rural credit, cooperative banks have witnessed a substantial increase in their scope of operations and have played a significant role in increasing liquidity in the hands of lower- and middle-class people. However, the misconduct of a few banks has maligned the entire urban cooperative banking system, leading to decreasing depositor trust. These instances cannot be allowed to demean the efforts put in by these banks in attaining the aims of financial inclusion, specifically with respect to the role played by them in the priority sector advances. This paper examines the problems faced by urban cooperative banks and analyses their future potential against the backdrop of their historical performance in financial inclusion. Also, it examines the various reform measures taken by the Reserve Bank of India in tandem with government efforts to keep the dependability and viability of the sector intact.

This paper focuses on the usage of accounts to avail various financial services under the financial inclusion drive by the Government of India. It examines the factors affecting the use of financial services by 500 respondents from three districts of Punjab, namely Jalandhar, Gurdaspur, and Sangrur. It investigates financial services such as deposits, withdrawals, loans, remittances, and insurance. It applies logistic regression to understand the factors affecting the usage of these services. Education was the most significant of these factors, indicating the need for promoting financial literacy among the masses, especially those who are marginalised.

Technology has had a disruptive effect on the delivery of fi nancial services, and adoption of digital solutions could help accelerate fi nancial inclusion. This article creates a road map for digital fi nancial inclusion in India using the framework based on the eight high-level principles of G-20 nations. While evaluating the progress under each one of these principles, the article concludes with policy recommendations both on supply and demand sides to achieve the coveted digital fi nancial inclusion.

The status of digital technology adoption after the launch of Pradhan Mantri Jan Dhan Yojana in 2014 is examined. Using microdata from two rounds (2013 and 2015) of a pan-India survey, the uptake of digital technology platforms among Indian adults for making financial transactions is examined and its determinants are investigated. The results suggest that being male and having a higher education, salaried job, smartphone, and access to mobile internet are positively associated with higher uptake of digital technology platforms. These results are fairly robust across empirical specifications.