Financial Inclusion through Business Correspondents: Strategies, Impact and Challenges in India

Financial Inclusion is important for socio-economic development of any country and plays critical role in developing country like India. To promote financial inclusion in India Reserve Bank of India has taken early initiatives through Lead Bank Schemes however the real thrust came only after the first half of 2000s decade when RBI started various new initiatives. However, World Bank Findex database 2011 has shown that India lagged behind most of the developing nations on majority of the financial inclusion parameters. This study determines the strategies formulated to achieve high level of financial inclusion in India. One of the major strategies formulated and implemented by RBI was introduction of branchless banking through business correspondents (BCs). This study also determines the impact of BCs on financial inclusion in India. Exploratory and descriptive research design was employed to conduct the research. As per the nature of research, secondary data was collected mainly from annually published reports of RBI while other sources of data include World Bank’s Findex Database and Financial Access Survey conducted by IMF. The data was analysed mainly through descriptive analysis tools. The study finds that although RBI has put forward a decent endeavour to enhance financial inclusion in India still some areas need to be taken care of to achieve the desired level of financial inclusion.