SIKKIM: Chief Minister’s Rural Universal Financial Inclusion Programme


The banking industry has shown rapid expansion in volume and technology during the last decade. Despite making significant improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to include vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services.

What is Financial Inclusion? It is the taking of banking services to the common man or the delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. As banking services are in the nature of public good, it is essential that availability of these services to the entire population is the prime objective of public policy.

‘Inclusion’ entails compassion, understanding the poor, their lives, their needs and their risks. After opening a bank account, they graduate through stages: First, stabilization i.e. minimizing their risks; second, maintenance, i.e. the stability attained so far is maintained and preferably move towards higher earnings and ownership of assets; third, self sufficiency i.e. the household has become more resilient and started reaping the benefits of loans taken and assets owned.

Opening a bank account is only the beginning and not the end of financial inclusion. The next steps include ensuring that the account is operated by the woman of the household, use technology to allow easy access and trouble free operation, improve financial literacy and inculcate a saving habit, provide micro-credit and a whole range of other financial services – payments/remittances, savings, insurance.

[SOURCE: SIKKIM REPORTER / EDITED BY ASHOK CHATTERJEE]