Financial Inclusion refers to the provision of financial services to the people of the lower strata of society. India has a large disparity in socio-economic growth. To bridge the existing disparity, the Reserve Bank of India (RBI) set up the Khan Committee to look over the issue of financial inclusion. The recommendations of the Khan committee were incorporated in the RBI policy 2005-06.
RBI has directed all the banks to facilitate opening of no frills saving bank account with zero or nominal balance to lower income customers. This was done to ensure the financial inclusion to a greater extent in India.
In 2013, India’s first Financial Inclusion Index, called- CRISIL INCLUSIX was launched. The index is a scale of 0-100 with branch, deposit and credit penetration as the parameters of the index. CRISIL Inclusix used data from 2 lakh data points and 165 banks. The index has been started with banking services presently and has the provisions for extension to other services.