For India, a country of 1.3 billion, financial inclusion can be a difficult job but the idea of loan waiver following natural calamities do not always seem prudent and could cause a drain to the nation’s funds. Instead, the government could seriously explore having financial inclusion as a fundamental right, and like every right, should come along with a duty for citizens receiving its benefits. Despite the Central government’s best efforts, nearly 50 percent Indians still do not have bank accounts and only around 15 percent have access to formal credit lines, the need for wider financial inclusion has become imperative.

The RBI itself has recognised the need for financial literacy and its importance in the process of financial inclusion, following a number of studies by several top notch institutes. The Asian Development Bank Institute, the top financial institution’s research wing, has found in a 2016 study that “despite the existence of a large and well-regulated financial system dominated by commercial banks”; India’s record of financial inclusion is poor. According to data quoted by the ADBI, India is lowest in the region when it comes to the ratio between household debt and GDP.

The ADBI further noted that the lack of inclusion is particularly noticeable in rural India, where nearly 60 percent Indians live. Data from 2013–14 revealed that deposit per head was around Rs 9,200, with credit standing at about Rs 6,000 per head. This is primarily due to underrepresentation of formal banking channels in rural areas, even though experience has demonstrated that the rural poor repay “uncollateralized loans reliably and are willing to pay the full cost of providing them” because to them “access is more important than cost”. Interestingly, despite being part of the urban population, groups like migrant labourers do not have access to the formal financial sector.

The ADBI found that lack of inclusion is also noticed in the inadequate number of bank branches and ATMs in rural areas, where number of bank branches per 100,000 people is around one-third of that in urban areas and just around one-tenth when it comes to ATMs. Analysts and experts, however, noted that in recent times, with proliferation of mobile telephony and cheaper access to data plans is spearheading a tectonic shift in India, in terms of last mile access to financial services. While the trinity of Jan Dhan accounts, Aadhaar cards and mobile telephones has created an ecosystem that is gradually empowering people in rural areas to have better access to basic financial services, the cost of providing services to these areas come with significant challenges for financial institutions.