3.What could be the impediments to the initiatives adopted by the bank towards FI in the Indian
scenario?
The Union Bank of India strived to convert the prior order of Financial Inclusion by
accommodating with an advance one and it primarily centers around household indemnity, funds
associated with micro-credit, RuPay card and financial articulateness, accreditation of women, to
strike correspondent of banking on particular point, Direct Benefit Transfer (DBT) and lastly a
consolidated outlook to offer pension, banking, insurance services to underprivileged and
exposed groups.
The constraints addressed by the Union bank of India in order to implement these Financial
Inclusion are:
Demand Side Challenges:
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Higher margin of unbanked population extended over vast territories.
Restricted procurement of credit.
Lack of financial knowledge and consciousness about banking facilities.
High Sensitivity toward the risk associated with financial product and services of
underprivileged groups.
Lack of technical knowledge.
Expensive transaction cost for its maintenance of financial product and services.
Various documentation requirements like birth certificate, income certificate, address
proof etc.
Poor saving practices.
Supply side challenges:
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High expense and poor adaptation of technology.
Poor implementation of information technology that are inventive, stable and reliable.
Irresponsibility of banking coordinators and Banking correspondent as they are unwilling
to serve unrewarding customers and views financial inclusion as liability instead of
opportunity.
48% accounts that are inactive and have no balance.
Interim perspective of banks
Faulty delivery method which results in unsuccessful outcomes of schemes specially
designed for unbanked population.
Inadequacy of proper infrastructure
Capital shortage for growing BC's capacity and extension to unbanked region.
Insufficient micro-products like micro-insurance, micro-credit etc.
Lower emphasis on empowering women and conducting different government benefits
References
1. Chauhan, K. (2016, October 1). Union Bank of India-Inclusive Financial
Inclusion. Retrieved December 10, 2023, from INCLUSION - Mainstreaming the
Marginalised website: https://inclusion.in/domains/finance/2016/10/union-bankof-india-inclusive-financial-inclusion/
2. Varghese, G., & Viswanathan, L. (2018). Financial Inclusion: Opportunities,
Issues and Challenges. Theoretical Economics Letters, 08(11), 1935–1942.
https://doi.org/10.4236/tel.2018.811126