The latest agenda on which the RBI has been putting a great deal of focus is the issue of financial inclusion. An important question arises here is; why are we talking of financial inclusion now? The key driving force behind this approach is due to: focus on inclusive growth, banking technology has arrived and realization that poor is bankable. That is why; more and more emphasis has now been placed on building a more inclusive financial system that is based on lessons of the past. In fact, the past strategy for inclusion had mixed results. There are millions of bankable peoples in rural areas that are unbanked because of access and usage issues. Hence, a new and multi-pronged approach is needed to make the Indian banking system more inclusive in nature. This will require a concerted effort by several stakeholders (including the government of India, RBI, NABARD and commercial banks, RRB. etc.) to figure out effective way to provide financial services to the poor. It should lead to a set of financial sector reform that explicitly prioritizes inclusion.

This paper covers the issues of financial inclusion amongst rural communities in India by discussing- i) brief introduction of the current state of banking in India, ii) defining financial inclusion and steps taken for, iii) the key drivers of financial inclusion, focusing on access and usage issues, iv) finally, the way forward with potential solutions and suggestions to address the problems of financial inclusion.