International Journal of Engineering Technology, Management and Applied Sciences www.ijetmas.com April 2017, Volume 5, Issue 4, ISSN 2349-4476 567 Sonia Kamboj Financial Inclusion in India-Present Status and Challenges Ahead Sonia Kamboj* *Assistant Professor, Department of Commerce, Kalindi College, University of Delhi, Delhi Abstract: Financial inclusion is crucial for the overall growth of an economy. Banks play a major role in the mobilisation of funds from those is in excess of to those who are in the need of funds. RBI has taken numerous steps for financial inclusion in the country from time to time. But despite numerous steps taken by RBI and the government, a large section of the society is deprived of the basic financial services. Present study focuses on the initiatives taken by RBI for financial inclusion, present status of financial inclusion in India and also throws some light on the challenges ahead. Keywords: Financial Inclusion, India, RBI, Economic Growth 1. INTRODUCTION India is one of the largest and fastest growing economies in the world; the government of the country has taken numerous steps to benefit the unprivileged sections. But in the developing part of the world, more than half of the population has no access to the formal financial services which is main reason of the unequal distribution of wealth and slow economic growth.Poverty and financial exclusion has been the main concern for the policy makers in India. Numerous poverty elimination, employment generation programmes have been in operation in the country since a long time."TheNationalization of banks in 1969 and subsequent developments led to expansion of the geographical and functional reach by commercial banks, regional rural banks (RRBs) and cooperative credit institutions ﴾Dev, 2006﴿." Despite many initiatives by the government, a large section of the society remains deprived of the basic financial services which includes small farmers, women, unorganized sector workers etc.Indian economy though achieved a high growth momentum during 2003-04 to 2007-08, but still it is not able bring down the unemployment and poverty to a tolerable level. Majority of the population in the country continue to live under poor conditions and are outside the access of the basic health and education facilities. Union budget 2006-07 indicated that only 27 percent of cultivator households receive credit from formal sources whereas 22 percent receive credit from informal sources. A committee was proposed to be appointed by then Union finance minister P. Chidambram to look into the matter. A committee was appointed under the chairmanship of C Rangarajan for financial inclusion to find out ways to reach to the financially deprived sector and also to remove any informational barriers. 2. FINANCIAL INCLUSION꞉ THE CONCEPTUAL FRAMEWORK Financial inclusion is defined by RBI as, “process of ensuring access to appropriate financial products and services needed by all sections of the society ingeneral and vulnerable groups such as weaker sections and low income groups inparticular, at an affordable cost in a fair and transparent manner by regulated, mainstream institutional players” The Center for Financial Inclusion defies financial inclusion as: " Access to a full suite of financial services including credit, savings, insurance, and payments; Provided with quality-convenient, affordable, suitable, provided with dignity and client protection; And financial capability -clients are informed and able to make