Financial Inclusion calls for focused attention even in metro and urban centers. Its success depends on effective delivery models and out-of-the-box initiatives.

The following are some of the viewpoints on financial in clusion and credit penetration by the banking industry. There are 93 million mobile users today - the Compound Annual Growth Rate (CAGR) since 1999 is 85%. The number of mobile phones currently is more than the number of borrowers from the banking system. There is a clear need to increase the outreach and scale up operations at existing outlets.

The ratio between banks' deposits/accounts operated and total adult population still remains low, even compared to other developing economies. The Indian national average is just 59% compared to 92% in the UK which has a financial inclusion clause in its laws. Mere opening of a bank account alone would not be enough. Banks should offer all financial services to those who open accounts. This would wean rural India away from unorganized sector that charges high rates of interest. This situation needs to change. The consequences would be financial exclusion. Financial exclusion will lead to social exclusion.

The overall percentage of deposit account penetration of 45% for India is misleading since the break-up of figures shows that urban India has a penetration of 114% while the figure stands at a dismal 19% for rural India. Interestingly, for the year 2006, 93% of the borrowers in India borrowed less than Rs. 2 lakhs and their share in terms of total outstanding credit was just 18%.

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