Ejessr Paper 5

Emperor Journal of Economics and Social Science Research – ISSN No.
2581-8643
IMPACT OF FINANCIAL INCLUSION - A STUDY OF HIMACHAL

PRADESH
ANUBHA VASHISHT
Assistant Professor, D.A.V. College Chandigarh
A.K.VASHISHT
Professor, University Business School,
Panjab University Chandigarh
Abstract
The need for ensuring Financial Inclusion for attaining inclusive
growth has been emphasized everywhere in the world. There has been quite
an emphasis during recent past to expand financial services to all sections
of the society in India. Himachal Pradesh Govt. has an aim of making the
state as a Model State for inclusive growth and Financial Inclusion had
been given a very high priority. As a shared objective, both RBI and the
State Govt. took initiatives for implementing the decision of achieving full
Financial Inclusion. In Himachal Pradesh, significant progress in financial
inclusion has been achieved in quantitative terms. Financial inclusion has
significantly affected the socio economic well-being of the people of
Himachal Pradesh. More than three fourth of the respondents in the State
agree that their income, savings, opportunities for livelihood and financial
prudence have all increased due to awareness and utilization of banking
services. Only one fourth of the total respondents have reported increase in
their consumption, which implies that additional income goes to savings
and investment, rather than consumption.
Key words: Financial Inclusion, Himachal Pradesh, inclusive growth
Emperor Journal of Economics and Social Science Research Page 51

Emperor Journal of Economics and Social Science Research – ISSN No. 2581-8643
INTRODUCTION
The need for ensuring Financial Inclusion for attaining inclusive
growth has been emphasized everywhere in the world. It has been felt that
access to a formal well-functioning financial system can economically and
socially empower citizens, in particular rural and poor people. This can help
them to involve in productive economic activities, increase incomes and
ultimately improve their quality of life. The former UN Secretary General,
Kofi Annan, highlighted the reality and importance of Financial Inclusion
in the following words:
"The stark reality is that most poor people in the world still lack
access to sustainable financial services, whether it is savings, credit or
insurance. The great challenge before us is to address the constraints that
exclude people from full participation in the financial sector. Together, we
can and must build inclusive financial sectors that help people improve
their lives”
To have an in-depth study of various issues of Financial Inclusion,
GOI constituted a “committee on Financial Inclusion” under the
Chairmanship of Dr. C. Rangarajan. This committee adopted the following
broad working definition of Financial Inclusion:
“Financial Inclusion can be defined as the process of ensuring
access to financial services and timely and adequate credit where needed by
vulnerable groups such as weaker sections and low income groups at an
affordable cost.”

Efforts towards Financial Inclusion

 There has been quite an emphasis during recent past to expand financial
services to all sections of the society in India. Reserve Bank has taken
numerous steps to attract the financially excluded population into the
structured financial system. This will be clear from the following
developments:
 In November 2005, banks were advised to make available a basic
banking „no-frills‟ account with low or nil balances. It also decided to
make available all printed material used by retail customers in the
concerned regional language.
 In order to ensure that persons belonging to low income group, both in
urban and rural areas, do not encounter difficulties in opening bank
accounts, the know your customer (KYC) procedures for opening
accounts has been simplified.
 Banks have asked to introduce a General-purpose Credit Card (GCC)
facility up to Rs. 25000/- at their rural and semi urban branches. The
credit facility is in the nature of revolving credit entitling the holder to
withdraw up to the limit sanctioned. Based on assessment of household
cash flows, the limits are sanctioned without insistence on security or
purpose.
 A simplified mechanism for one-time settlement of overdue loans up to
Rs.25, 000/- has suggested for adoption. Banks have specifically
advised that borrowers with loans settled under the one time settlement

scheme will be eligible to re-access the formal financial system for

fresh credit.
 In January 2006, banks were permitted to utilize the services of non-
governmental organizations (NGOs/SHGs), micro-finance institutions
and other civil society organizations as intermediaries in providing
financial and banking services through the use of business facilitator
and business correspondent (BC) models.
 Other measures include setting up pilots for credit counseling and
financial education. A multilingual website in 13 Indian languages on
all matters concerning banking and the common person has launched by
the Reserve Bank on 18 June 2007.
 Institutionalization of the framework of Banking Correspondents (BCs)
has been a major step towards enhancing access of banking services.
RBI advocated a combination of „Brick and Mortar‟ structure with
„Mouse and Click‟ technology for extending financial inclusion in
geographically dispersed areas.
 On the regulatory side, the banks mandated to open at least 25 per cent
of their new branches in unbanked rural centers. Taking into account
the difficulties encountered by common people in meeting the „Know
Your Customer (KYC)‟ requirements for opening bank accounts,
several measures taken. For example, RBI allowed banks to accept self-
certification for opening of basic service bank accounts. RBI has
encouraged banks to open Aadhaar2 Enabled Bank Accounts by linking
Aadhaar numbers of individuals, wherever available, with the Basic

Savings Bank Accounts opened for them, so that their credit histories
can also built up over time.
 Co-terminus with the above efforts, RBI also encouraged banks to adopt
a structured and planned approach to financial inclusion commitment at
the highest levels through preparation of Board-approved Financial
Inclusion Plans (FIPs). The first two phases of FIPs implemented over
2010-13 and 2013-16 were interspersed with the implementation of
PMJDY by the Government of India during 2014-15, whereby the
supply side efforts received an extra push.
 RBI has granted in-principle approval to some entities to set up
differentiated banks namely “Small Finance Banks” (SFBs) and
“Payments Banks” to further the cause of financial inclusion in the
country. Other than serving as vehicles for savings, SFBs and Payments
banks has expected to enhance the supply of credit to small business
units, small and marginal farmers, micro and small industries and other
entities in the unorganized sector and enable provisions for cost-
efficient remittance services in a secured technology driven
environment respectively.
 Considering the strong linkage between financial inclusion and the
payment systems, RBI has taken several steps. Some of these include
encouraging use of Mobile Banking, pre-paid instruments in the form of
digital wallets and mobile wallets, operationalization of the Aadhaar
Bridge Payment System (ABPS) and Aadhaar-Enabled Payment system
(AEPS) etc. While there is considerable improvement in access of

banking services through a mix of physical and virtual mode, it has

believed that there should be a fair balance between the number of BCs
and brick and mortar branches for better alignment of the inclusion
efforts. Accordingly, it has mandated to open physical bank branches in
all villages above a population of 5000 in a phased manner. We feel this
would also enable banks not only provide quality financial services but
also timely support to their BC network.
 The BC Model is a critical lynchpin of our Financial Inclusion
initiative. We believe that to support the BC structure, a vital first step
is developing a BC Registry. This would not only ensure greater
oversight on the functioning of BCs but would also provide more
confidence to the end customers. A scheme for graded certification/
training programmes for BCs is also being introduced to enable the BCs
with a good record of accomplishment and advanced training to handle
complex tasks that has beyond deposits and remittances.
Financial Inclusion Plans for Banks (2016-19)
To sustain the momentum of achieving the financial inclusion
objectives by setting FIP targets for banks, the third phase of Financial
Inclusion Plans for the next three years 2016-19 has initiated. Under the
third phase, the focus is on more granular monitoring of the progress made
by banks under FIPs at district level.
Demand Side Interventions
Having spoken about the progress and some recent measures taken
by RBI on supply side, let me talk about an equally important, but less

focused, demand side aspects of Financial Inclusion. As I mentioned

earlier, banks have opened about 440 million accounts under the push from
RBI and the PMJDY and hence, it is right time to focus on the demand side
which is to focus on enhancing capabilities so that the individual is in a
position to not merely avail the offered services, but is also capable of
demanding preferred products and services suitable to her need / choice.
Our belief is that unless the demand side measures adequately supplement
the supply side measures, the goal of financial inclusion would remain the
proverbial „wild goose chase‟.
Financial Literacy Centres (FLCs)/ Rural Self Employment Training
Institutes
Banks in India have mandated to set up FLCs for extending
financial literacy. Currently, about 1380 FLCs across India are functional
which adopt a tailored approach to conduct of camps. Special focus has
given on people newly inducted into the banking system. Besides this,
tailored camps have conducted for five different target groups i.e. farmers,
small entrepreneurs, SHGs, School students and senior citizens. Going
forward, given the challenges of skewed distribution of existing FLCs in a
few states, limited outreach and to have an exclusive focus on financial
literacy at the ground level, we are encouraging banks to set up CFLs
(Centres for Financial Literacy) at the block level on a pilot basis in a few
states. The Rural Self Employment Training Institutes (RSETIs) have set up
by various banks all over the country at the district level. The key objective

of RSETI is “Short term training and long term hand holding with
assistance to credit linkage for trainees”.
Direct Benefit Transfer and Aadhaar Seeding of accounts
An important driver for enhancing the demand side of financial
inclusion is Direct Benefit Transfer (DBT). It has the potential to be game
changer. If entitlements under various state sponsored schemes starts
directly flowing into the bank accounts of individuals under DBT mode, it
can act as a catalyst to encourage saving habit leading to build up of
investment and seed capital for availing productive credit.
Financial Inclusion in Himachal Pradesh
Himachal Pradesh Govt. has an aim of making the state as a Model
State for inclusive growth and Financial Inclusion has given a very high
priority. As a shared objective, both RBI and the State Govt. took initiatives
for implementing the decision of achieving full Financial Inclusion. A
Working Group on „Improvement of Banking Services in Himachal
Pradesh‟ was constituted under the chairmanship of Dr. J. Sadakkadulla,
Regional Director, RBI to review the role banks and financial institutions
in supporting the Government‟s initiatives for inclusive development and to
recommend measures for enhancing the outreach of banking services. The
Group submitted its report in Nov.2007. While appreciating the
commendable banking outreach scenario in the state, the Group has also
pointed out scope for further improvements particularly on the front of
credit-linkages of households.

The following points highlight the initiatives taken in the context of

financial inclusion in the State
 State has a wide spread branch network of bank branches. For ensuring
effective banking in the state, different banks have given the
responsibility of leading the banking activities. UCO Bank has such
responsibility for 4 districts, in addition to working as a convener of the
State Level Banking Committee (SLBC). PNB and SBI have lead bank
responsibilities for 6 and 2 districts respectively. In order to give
intensive attention to the state, RBI set up a sub-office at Shimla
recently.
 Banks have issued Kisan Credit Cards to the farmers. Substantial
proportion of the loans granted by the banks is going to priority sectors
like agriculture, small-scale industry services.
 Banking sector is looking forward for a strong micro-finance movement
in the state through self-help groups (SHG)
 As a part of their progressive approach, RBI has encouraged banks to
use the services of NGO‟s, SHG‟s, MFI‟s and other Civil Society
Organizations and of course, Post Offices as intermediaries in providing
financial and banking services through the use of „Business Facilitators‟
and „correspondent‟ Models
 Technological Inclusion aiming at the provision of banking services at
the door steps of the people has been given a high priority.
 All non-banking treasuries have been converted into banking treasuries

 Mass financial awareness, deployment of Banking Facilitators, Banking

Correspondents are other steps taken to enhance the reach of banking
services.
 State Govt. has followed a progressive and pro-active approach for
enhancing the effectiveness of the banking services in the state.
exemption from stamp duty and registration charges has been granted
on loans to the agricultural activities
Need for the Study
With the objective of facilitate financial inclusion, banks were urged
by RBI to review their existing practices to align them in such a way that
these services are available to so far excluded segments of the society, at
affordable rates. The broad objective was to bring the common person into
banking fold that was termed as financial inclusion.
 In this context, with a view to achieving the objective of greater
financial inclusion, districts were identified for financial inclusion (FI),
committees were constituted within the identified districts for chalking
out strategy for achieving 100% financial inclusion .
 In Himachal Pradesh all the districts were identified for achieving 100%
financial inclusion and villages were allocated to various banks
operating in the districts advising them to make available a basic
banking 'no-frills' account either with 'nil' or very low minimum
balances as well as charges that would make such accounts accessible to
vast sections of population.

In Himachal Pradesh, significant progress in financial inclusion has

achieved in quantitative terms. It is imperative to study as to how financial
inclusion has affected the wellbeing of the beneficiary. This requires
evaluation of qualitative Performance evaluation in financial inclusion
Quantitative performance in financial inclusion can be judged by examining
the impact of financial inclusion on certain socio economic parameters like
income, livelihood opportunities, savings, consumption and financial
prudence of the people.
OBJECTIVES OF THE STUDY
The study seeks to assess the impact of e financial inclusion in
Himachal Pradesh. This has done analyzing the impact of banking services
on income, livelihood opportunities, savings, consumption and financial
prudence of the people.
Sample of the Study
The sample of the study consists of 40,000 household (both rural
and urban areas), representing all districts of Himachal Pradesh.
Data for the Study
The study based on both primary as well as secondary data. The
primary data has collected through the administration of a structured
questionnaire. This questionnaire includes question pertaining to the
different aspects of financial inclusion and its impact on the respondents.
The secondary data has collected from relevant publication of Reserve bank
of India and the Directorates of Economics and Statistics of the states of
Himachal Pradesh and Punjab. Miscellaneous sources like research papers,

articles published in various magazines, journals and newspapers have

studied thoroughly to supplement the primary and secondary data.
Data Analysis and Discussion
The impact of banking services on the economic prosperity of
people of Himachal Pradesh has evaluated by studying the impact of
banking services on income, livelihood opportunities, savings, consumption
and financial prudence of the people. The respondents were asked whether
banking services have increased, decreased or made no impact on above-
mentioned parameters.
Effect on Income
The effect of banking services on the income of the respondents has
depicted in Table 1. In totality, 82.31 per cent respondents in Himachal
Pradesh reported increase in income due to effective banking services. This
increase in income by respondents perceived to be increasing because of the
interest they receive on their deposits in the banks; the money, if any, they
receive through loans etc.
Among the rural villages of Himachal Pradesh, 99.99 per cent
respondents in district Lahul & Spiti have reported increase in income for
all the different category of people including General, SC, ST and OBC .
Turning to the urban picture of Himachal Pradesh, 100 per cent respondents
in Solan and Kullu reported increase for the respondents of different social
classes followed by Bilaspur (99.74%) and Shimla (95.26%).

Table 1
Effect on Income (Figures in percent)
DISTRICTS INCREASE DECREASE NO EFFECT
BILASPUR 98.37 0.34 1.29
CHAMBA 70.81 0 29.18
HAMIRPUR 74.2 0 25.79
KANGRA 75.06 2.78 22.18
KINNAUR 96.73 0 3.28
KULLU 98.84 0 1.15
LAHUL AND SPITI 99.99 0 0
MANDI 90.24 1.73 8.03
SHIMLA 93.91 0.89 5.2
SIRMAUR 83.14 0 16.86
SOLAN 92.23 0 7.77
UNA 71.6 6.65 21.76
TOWNS
BILASPUR (MCI) 99.74 0 0.26
CHAMBA(MCI) 91.33 0 8.66
HAMIRPUR(MCI) 0 0 100
DHARMSALA(MCI) 91.53 4.05 4.42
KULU(MCI) 100 0 0
MANDI(MCI) 94.32 0.78 4.9
SHIMLA 95.26 1.36 3.39
NAHAN(MCI) 84.08 0 15.92
SOLAN(MCI) 100 0 0
UNA(MCI) 3.83 0 96.18
OVERALL HP 82.31 1.47 16.22
Effect on Opportunities for Livelihood
Effect on Opportunities for Livelihood in the state of Himachal
Pradesh has shown in Table 2. In totality, 80.46 per cent respondents in
Himachal Pradesh reported increase in opportunities for livelihood due to
effective banking services. The respondents perceive the increase in
livelihood because of the different kind of loans and the schemes they can
avail from the banks (even if in actual they might not be taking it).
Perceiving the banks to be good for increasing the livelihood in itself marks
a good image of the banks the public have in their minds.


respondents in district Lahul & Spiti reported increase in opportunities for
livelihood. Turning to the urban picture of Himachal Pradesh, in Kullu and
Solan 100 percent of the respondents have reported increase in
opportunities for livelihood.
Table 2
Effect on Opportunities for Livelihood (Figures in percent)
BILASPUR 94.7 0.06 5.24
CHAMBA 79.14 0 20.85
HAMIRPUR 37.64 0.38 61.97
KANGRA 80.21 2.08 17.72
KINNAUR 89.61 0 10.37
KULLU 98.84 0 1.15
LAHUL and SPITI 99.99 0 0
MANDI 89.53 0.49 9.98
SHIMLA 87.86 1.37 10.77
SIRMAUR 98.95 0 1.04
SOLAN 85.77 0 14.24
UNA 69.31 3.2 27.5
TOWNS
CHAMBA(MCI) 89.34 0 10.66
DHARMSALA(MCI) 91.53 4.05 4.42
KULU(MCI) 100 0 0
MANDI(MCI) 98.55 0 1.44
SHIMLA 79.85 1.36 18.79
NAHAN(MCI) 83.23 0 16.79
SOLAN(MCI) 100 0 0
UNA(MCI) 8.25 0.4 91.34
OVERALL HP 80.46 0.94 18.58
Effect on Savings
Effect on savings of the respondents due to banking services in the
state of Himachal Pradesh has shown in Table 3. In totality, 88.20 per cent
respondents in Himachal Pradesh depicted increase in savings due to

effective banking services. This increase comes from different kind of

deposits people can have in the banks.
Among the rural villages of Himachal Pradesh, 100 per cent of the
respondents in District Kullu reported increase in savings. Turning to the
urban picture of Himachal Pradesh, 100 per cent of the respondents in
Solan and Kullu reported increase in savings.
Table 3
Effect on Savings (Figures in percent)
DISTRICTS Increase Decrease NO Effect
BILASPUR 99.61 0 0.4
CHAMBA 89.23 0 10.78
HAMIRPUR 37.26 60.84 1.9
KANGRA 87.26 7.37 5.38
KINNAUR 84.51 10.38 5.1
KULLU 100 0 0
LAHUL and SPITI 99.99 0 0
MANDI 97.11 0.04 2.85
SHIMLA 96.59 0.47 2.94
SIRMAUR 98.57 1.21 0.22
SOLAN 96.04 0.91 3.04
UNA 75.32 7.83 16.84
TOWNS
CHAMBA(MCI) 95.54 0 4.44
HAMIRPUR(MCI) 94.59 0 5.41
DHARMSALA(MCI) 56.16 43.83 0
KULU(MCI) 100 0 0
MANDI(MCI) 97.56 0.33 2.11
SHIMLA 97.98 1.36 0.68
NAHAN(MCI) 94.28 0 5.72
SOLAN(MCI) 100 0 0
UNA(MCI) 97.79 0 2.21
OVERALL HP 88.2 7.48 4.31
Effect on Consumption
Effect on consumption of the respondents due to banking services in
the state of Himachal Pradesh has shown in Table 4. In totality, 70.55

percent respondents reported no effect on their consumption due to banking

services while 24.59 percent respondents in Himachal Pradesh reported
increase in their consumption. Majority of the people did not relate increase
in the consumption because of the banking services.
respondents of district Kinnaur have reported increase in consumption.
Turning to the urban picture of Himachal Pradesh, 53.80 per cent
respondents of Shimla reported increase followed by Bilaspur (43.86%).
Table 4
Effect on Consumption (Figures in percent)
BILASPUR 48.25 2.15 49.61
CHAMBA 22.36 6.44 71.22
HAMIRPUR 32.03 18.77 49.2
KANGRA 17.98 5.52 76.51
KINNAUR 75.96 0 24.05
KULLU 0 1.16 98.85
LAHUL and SPITI 41.33 6.12 52.55
MANDI 18.05 0.65 81.31
SHIMLA 53.34 3.07 43.6
SIRMAUR 7.25 0.05 92.7
SOLAN 27.1 4.26 68.65
UNA 27.81 2.38 69.82
TOWNS
BILASPUR (MCI) 43.87 0 56.14
CHAMBA(MCI) 34.9 0 65.11
DHARMSALA(MCI) 37.01 49.9 13.07
KULU(MCI) 1.84 0 98.16
MANDI(MCI) 4.56 0.33 95.11
SHIMLA 53.8 10.59 35.62
NAHAN(MCI) 30.61 0.1 69.3
SOLAN(MCI) 0 0 100
UNA(MCI) 12.68 1 86.33
OVERALL HP 24.59 4.86 70.55

Effect on Financial Prudence

Effect on financial prudence of the respondents due to banking
services in the state of Himachal Pradesh has shown in Table 4.42. In
totality, 89.07 per cent respondents in Himachal Pradesh reported increase
in financial prudence due to effective banking services. Visiting the banks,
interacting with bank officials, information gathering through pamphlets
and posters of the banks has made the people financially prudent.
Among the rural villages of Himachal Pradesh, 100 per cent
respondents of district Kullu have reported increase in financial prudence
for all the different categories of respondents taken together. Turning to the
urban picture of Himachal Pradesh, 100 per cent respondents of Solan and
Kullu reported increase in financial prudence followed by Bilaspur
(99.74%).
Analyzing the role of banking services on financial prudence with
regard to rural respondents under economic category, all respondents of
Kullu found increase followed by Bilaspur (99.83%) and Mandi (96.37%).
Respondents in urban area of district Solan viewed 100 percent increase
due to banking services in this category followed by Kulu (99.99%).
Table 5
Effect on Financial Prudence (Figures in percent)
DISTRICTS Increase Decrease No effect
BILASPUR 99.83 0 0.17
CHAMBA 87.18 0 12.81
HAMIRPUR 89.13 9.17 1.7
KANGRA 78.83 1.66 19.51
KINNAUR 83.79 0 16.21
KULLU 100 0 0
LAHUL and SPITI 87.24 0 12.75
MANDI 96.35 0 3.63

SHIMLA 91.18 0.43 8.39

SIRMAUR 95.82 0 4.17
SOLAN 86.53 1.67 11.8
UNA 82.15 0.76 17.08
TOWNS
CHAMBA(MCI) 95.54 0 4.44
HAMIRPUR(MCI) 94.59 0 5.41
DHARMSALA(MCI) 56.17 21.91 21.92
KULU(MCI) 100 0 0
MANDI(MCI) 99.22 0.11 0.67
SHIMLA 86.5 2.04 11.47
NAHAN(MCI) 89.04 0 10.97
SOLAN(MCI) 100 0 0
UNA(MCI) 99.6 0.2 0.2
OVERALL HP 89.07 1.55 9.39
CONCLUSION
Financial inclusion has significantly affected the socio economic
wellbeing of the people of Himachal Pradesh. 82.31 per cent respondents in
Himachal Pradesh reported increase in income due to effective banking
services. This increase in income by respondents was perceived to be
increasing because of the interest they receive on their deposits in the
banks; the money, if any, they receive through loans etc. 80.46 per cent
respondents in Himachal Pradesh reported increase in opportunities for
livelihood due to effective banking services. The respondents perceive the
increase in livelihood because of the different kind of loans and the
schemes they can avail from the banks (even if in actual they might not be
taking it). 88.20 per cent respondents in Himachal Pradesh depicted
increase in savings due to effective banking services. 70.55 percent
respondents reported no effect on their consumption due to banking
services while 24.59 percent respondents in Himachal Pradesh reported

increase in their consumption. 89.07 per cent respondents in Himachal

Pradesh reported increase in financial prudence due to effective banking
services. Visiting the banks, interacting with bank officials, information
gathering through pamphlets and posters of the banks has made the people
financially prudent. Only one fourth of the total respondents have reported
increase in their consumption, which implies that additional income goes to
savings and investment, rather than consumption.
REFERENCES
1. Aggarwal Amol , “ Need for Financial Inclusion with an Indian
Perspective” Economic Research , March 3 , 2008
2. Antonella De Angelia1, Uday Athavankar, Anirudha Joshi, Lynne
Coventry et.a1, Graham I.Johnson a (2006), “Introducing ATMs in
India: A Contextual Inquiry”Advanced Technology and Research, NCR
Financial Solutions Division, 3 Fulton Road, Dundee, DD2 4SW, UK
3. Barth, J., G. Caprio and R. Levine (2001): The Regulation and
Supervision of Banks around the World: A New Database, World Bank
Policy Research Working Paper No. 2588.
4. Business India And Micro Financee (2007), “Financial Inclusion In
India: Trends Beyond Micro Finance” January 19, 2007
5. Chakrwarty ,K. C.(2007), “ Financial Inclusion Concept, Issues and
Roadmap‟‟
6. Connolly, C., and K.Hajaj (2001): "Financial Services and Social
Exclusion", Financial Services, Consumer Policy Center, University of
New South Wales.

7. Financial Inclusion Report (2006) , “Financial Inclusion, Financial

Stability And Payment Systems Report‟‟ Bank Negara, Malaysia
8. Ghoshal, S.N., “Some Radical Thoughts on Microfinance”, Professional
Banker, Vol.5, No.10, October 2005. Pp.61-65
9. Leeladhar, V.,(2005) “ Taking Banking Services to the Common Man
Financial Inclusion” lecture delivered by Deputy Governor Reserve
bank of India at the Fed bank Hormis Memorial Foundation at
Ernakulam on December 2, 2005
10. Mahajan, Vijay (2004): „Deregulating the Rural Credit‟, Seminar,
September. NSSO (2005): Indebtedness of Farmer Households
11. Mahendra Dev ,S.,(2006), “ Financial Inclusion: Issues And
Challenges”Economic and Political Weekly, October 14, 2006, 4313
12. Mohan, R. (2002): "Transforming Indian Banking: In Search of a Better
Tomorrow", RBI Bulletin (January).

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Emperor Journal of Economics and Social Science Research – ISSN No.

IMPACT OF FINANCIAL INCLUSION - A STUDY OF HIMACHAL

Emperor Journal of Economics and Social Science Research Page 51

Emperor Journal of Economics and Social Science Research Page 52

Efforts towards Financial Inclusion

Emperor Journal of Economics and Social Science Research Page 53

scheme will be eligible to re-access the formal financial system for

Emperor Journal of Economics and Social Science Research Page 54

Emperor Journal of Economics and Social Science Research Page 55

banking services through a mix of physical and virtual mode, it has

Emperor Journal of Economics and Social Science Research Page 56

focused, demand side aspects of Financial Inclusion. As I mentioned

Emperor Journal of Economics and Social Science Research Page 57

Emperor Journal of Economics and Social Science Research Page 58

The following points highlight the initiatives taken in the context of

Emperor Journal of Economics and Social Science Research Page 59

 Mass financial awareness, deployment of Banking Facilitators, Banking

Emperor Journal of Economics and Social Science Research Page 60

In Himachal Pradesh, significant progress in financial inclusion has

Emperor Journal of Economics and Social Science Research Page 61

articles published in various magazines, journals and newspapers have

Emperor Journal of Economics and Social Science Research Page 62

Emperor Journal of Economics and Social Science Research Page 63

Among the rural villages of Himachal Pradesh, 99.99 per cent

Emperor Journal of Economics and Social Science Research Page 64

effective banking services. This increase comes from different kind of

Emperor Journal of Economics and Social Science Research Page 65

percent respondents reported no effect on their consumption due to banking

Emperor Journal of Economics and Social Science Research Page 66

Effect on Financial Prudence

Emperor Journal of Economics and Social Science Research Page 67

SHIMLA 91.18 0.43 8.39

Emperor Journal of Economics and Social Science Research Page 68

increase in their consumption. 89.07 per cent respondents in Himachal

Emperor Journal of Economics and Social Science Research Page 69

7. Financial Inclusion Report (2006) , “Financial Inclusion, Financial

Emperor Journal of Economics and Social Science Research Page 70

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