- H.Lalnunmawia Asst. Professor Govt. T.

Romana College

Introduction
India is one of the fastest growing countries in the

world but the growth is not inclusive enough to be sustainable in the long run. Recognizing the importance of inclusive growth the strategy for the Eleventh Plan was envisaged to sustain a development process that is inclusive and broad based. Financial inclusion is one such strategy that will make growth broad based and inclusive.

Financial Inclusion - Meaning

Financial inclusion is the delivery of banking services at an

affordable cost to the vast sections of disadvantaged and low income groups (Leeladhar, 2005). Financial inclusion is the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups....at an affordable cost (Rangarajan, 2008). The various financial services include savings, loans, insurance, payments, remittance facilities and financial counseling / advisory services provided by the formal financial system.

Scenario of Financial Exclusion

Financial exclusion is not only a national concern, it is

a global problem. 2.5 billion adults i.e. over half of worlds adult population, do not have a savings or credit account with formal financial institutions.* 2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East.* * Findings of Financial Access Initiative, a research consortium based at
New York University in 2009.

Financial Exclusion in India

In India, out of the 6,00,000 habitations, only about 30,000

have a commercial bank branch and just about 40 per cent of the population across the country have bank accounts, and this ratio is much lower in the north-eastern states. People having debit cards comprise only 13 per cent and those having credit cards only a marginal 2 per cent. (RBI Monthly Bulletin, Jan. 2010) NSS data reveals that, in 2003, out of the 89.3 million farmer households in the country, 51 per cent did not seek credit from either institutional or non institutional sources. Only 27% of total farm households are indebted to formal sources which in other words mean that 73% of farm households do not have access to formal credit sources.

Financial Inclusion in Mizoram

Comparison with other North-Eastern states: According to 2001 Census Report, 31.8% of the households in Mizoram availed banking services which is the second highest (next to Arunachal Pradesh) in the North-East, but is less than the national percentage of 35.5%. Mizoram holds the best position in the North-East in terms of the number of population per bank branch at 9405 (based on 2011 provisional census). In terms of number of unbanked villages with population of more than 2000, Arunachal Pradesh (11) has the least number followed by Mizoram (14).

Branch Network & Saving Accts.

There are 116 bank branches in the state out of which

81 operates in rural areas and 35 in semi urban/urban areas. As per the 2011 Provisional Census there are 830 villages and 23 towns in the state which shows that many villages are unbanked. The total number of saving accounts in the state is 4,33,613, this means the percentage of population having saving bank accounts in the state is around 40%. which is lower than the National average of 46.23%

Advances to Priority Sector

Regarding advances to priority sector and advances to

weaker sections, all the banks fulfilled the RBI norm of 40% and 10% of Net Bank Credit (NBC) respectively. However, with regards to agricultural advances the situation is not encouraging, only UBI, PNB, ICICI and MRB have fulfilled the norm of 18% of NBC. As desired by the RBI a sub-committee was formed under the chairmanship of the General Manager, NABARD to suggest measures for increasing agricultural credit in the State.

Advances to Sensitive Sections

The total advances to minorities in the state amounted

to `3,973.38 lakhs, with 2161 benficiaries, the bulk of the advances provided by SBI. There were 28,172 women beneficiaries sharing total advances of `42,320.20 lakhs. Total advances of `118.60 lakhs was made to 82 physically handicapped persons in the state with SBI and PNB the only provider.

No Frills Account & GCC

In 2005, the RBI had advised all banks to make

available a basic banking 'no-frills' saving account either with 'nil' or very low minimum balances. In Mizoram, all banks except Vijaya bank have made provisions for opening no-frills account and the number of such accounts have reach 1,11,937, with the MRB as the highest contributor. 609 General Credit Cards have been issued in the state, 560 by MRB, 26 by UCO Bank, 13 by SBI and 10 by Syndicate Bank.

BC Model & SHG-Bank Linkage

As on 31st March, 2011 only 2 Business Correspondents

(BCs) have been engage in Mizoram by the SBI, all other banks have not introduced the system. In 2010 the RBI has issued a new list of eligible individuals/entities for BC which include retired bank employees, retired teachers, retired government employees and ex-servicemen, owners of Fair Price shops, PCOs, Petrol pumps, as well as NGOs and SHGs, etc. 2854 SHG with total members of 38,461 were credit linked to banks. The total SHG advances of different bank branches have reached `3402.16 lakhs.

100% Financial Inclusion Drive

The SLBCs have been advised to identity one or more

districts for 100 per cent financial inclusion. The SLBC in Mizoram has identified Aizawl District for 100% financial inclusion. Studies conducted by external agencies through RBI (2009) shows that though the SLBCs have declared several districts as 100% financially included, the actual financial inclusion has not been to that extent. Most of the accounts that have been opened as a part of the financial inclusion drive have remained inoperative.

Financial Literacy & Awareness

All scheduled commercial banks have been advised to

give wide publicity to the facility of 'no-frills' account including on their web sites. The number of blocks in Mizoram in which awareness or publicity campaigns have been launched is 13 by MRB. Financial Outreach Camps have been organised in Seling and Sesawng in 2010 and in Serkhan in 2011. RBI has also advised the convener-bank of each SLBC to set up a Financial Literacy-cum-Counseling Centre(FLCC) in any one district on a pilot basis.

The Tasks Ahead

Banks in the state need to be engaged more in

financial literacy and awareness campaign. If the public are not aware of it a good scheme can be buried away. Any initiative of financial inclusion in the state has to be technologically driven. Taking into consideration the topography, culture, high literacy rate and the widespread network of NGOs, it is desirable to identify the most suitable and efficient method of providing financial services to rural households in the state.