ABSTRACT
The chapter examines the evolution of the policy on financial inclusion after the start of the process of economic liberalisation. It identifies four phases – of promoting co-operatives; of promoting and controlling banks; of opening up the space for private sector; and the phase of opening up multiple possibilities, including technology-enabled and innovative institutional architecture in the private sector in a big way.
The chapter also identifies that the intellectual foundations for the current architecture were laid by the Narasimham committee, set up first in 1991 and a second committee in 1998. The recommendations of the Raghuram Rajan committee reconfirmed the directions laid out by the Narasimham committee and made some further recommendations on reforms, which took the banking reforms ahead. In addition, the report by the Rangarajan Committee on financial inclusion argued for specific, inclusive and targeted handling of the issue of financial inclusion.
While the intellectual base were provided by these three significant reports, it took a while for the ideas to manifest into institutions, policy and regulation, and in the final phase, it was possible to see the manifestation of a significant part of the intellectual foundation bear fruition in getting translated into action.
