Financial Sector Reforms: The Way to Socio-Economic Inclusion

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Author	Rajesh Pal
ISSN	2225-7217
On Pages	94-101
Volume No.	2
Issue No.	1
Issue Date	March 01, 2020
Publishing Date	March 01, 2020
Keywords	Big bang approach, Rural Internet Kiosks, Virtual banking, Universal Banking, social control.

Abstract

The immediate question, of course, is whether we need a new generation reforms at all. There are two ways of answering this. First on the retail side, financial services are not reaching the majority of Indians. The single most frequently used source of loans for the median Indian household is still the moneylender. Second on the wholesale side, the financial sector is not able to meet the scale or sophistication of the needs of large corporate India, as well as of public infrastructure, and does not penetrate deeply enough to meet the needs of small and medium-sized enterprises in much of the country. The negligence of credit to priority sectors called for nationalization of commercial banks in1969. The broad aims of nationalization were �to control the heights of the economy and meet progressively and serve better the needs of the development of the economy in conformity with the national policy and objectives. The period after 1964 was aptly described as the phase of innovative banking or revolutionary phase. To do away with the persistent deficiencies of the banking system, the scheme of social control was introduced in 1967. The starting point for a vibrant ecosystem for financial inclusion is to ensure that the organizational structure supports and creates institutions that can reach the poor.

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