ON 3rd & 4th FEBRUARY 2011,

SCHOOL OF DEVELOPMENT STUDIES
DEPT. OF APPLIED ECONOMICS

International Conference
ON
Innovation & Inclusion in Banking:
Issues,Strategies and Options

The banking sector in the modern period has undergone radical changes to keep pace with the development ethos of the nation. But we have to meticulously assess whether these developments and benefit of the banking system has percolated to all sections and segments of people. It is also essential to assess whether the innovation in banking system has culminated in augmenting efficiency and productivity of banks. The objective of the conference is to discuss the lessons of innovation and inclusion in banking, examine the emerging issues in the global banking scenario, analyze the current strategies followed to tackle the basic issues of financial inclusion and financial empowerment of vulnerable sections .The conference aims to formulate a development perspective for the banking and financial empowerment of the vulnerable sections with a human face and human touch. Based on the conference, we wish to bring out a vision document for the financial inclusion and inclusive growth strategy of India.

THE CONTEXT

For every type of economic activities capital is the most important fuel required and bank cash is the liver with which the whole gigantic system of economy, business and industry is managed, mentored and even manipulated. The banking development has undergone a long period of transition from the earlier outmoded form of banking to popular electronic banking. During these transitions banks has witnessed several structural and functional changes and how banks have became the nucleus of global and national economy irrespective of its organizational set up. Banks were also treated as an engine of social and economic upliftment. It is with this prime motto the concept of financial inclusion and micro credit has been developed. With the inception of the new millennium, financial markets/products/services have become increasingly complex and the public is finding it increasingly difficult to make informed choices. The financial literacy and credit counseling etc. advocated by RBI for Indian banks is a step in this direction to empower the vulnerable for credit access and social improvement. Similarly the real initiative of the establishment of Self Help groups and boosting of Micro Finance for the vulnerable is also praiseworthy achievement and a milestone in the history of banking development. The recent development of micro finance institution has benefited a lot in the economic empowerment of vulnerable in the rural segment of the country but it is faced with serious challenges. Similarly a number of finance companies, urban co-operative societies and banks, several credit and saving mechanisms have been present in the urban area, but still the level of financial exclusion has been high. So there is severe problem of tackling financial exclusion and augmenting financial empowerment of the rural and urban vulnerable. The basic problem faced by micro finance institution are availability of funds, increasing resource costs, higher risks, limitations of HR availability and also a passive policy of government.

Health risks impact upon the vulnerable urban population is much more than the rural counter parts. Epidemics and diseases arising from insanitary conditions in the urban slums force the people to spend more on their wellness. Health insurance for such people is a prime requirement. The NGOs and micro finance institution has a potential role to take effective steps against health risk and strengthen their livelihood. So there is the need to explain the scope of micro finance institution in checking the vulnerability and health risks of poor people in the urban slum areas.