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ABSTRACTThe concept of financial inclusion becomes a challenge for the Indian economy because majority of the population is still not included in the inclusive growth. Lots of measures are taken by the Reserve Bank of India and Government of India towards financial inclusion but the final result is not much satisfactory. This paper focuses on using the available resources like Banking Technologies, Indian Post Office, Mobile phones etc. thus making it more effective and user friendly in favor of the rural population and also the formal sector.Keywords: Financial inclusion , Business correspondents , Indian economy1. INTRODUCTIONWith the development in the Indian economy, especially with the focus on achievement of sustainable development, it is necessary to include participation from all the sections of the society. Lack of financial literacy among the population is acting as a drawback towards the growth of the economy because majority of the population does not have access to formal credit. This is the major reason for the serious issue for the economic progress in the country. To overcome these issuesthe banking sector has come out with fewtechnological innovations like the automated teller machines (ATM) , credit and debit cards, internet banking etc.      The Reserve Bank of India (RBI) and the Government of India (GOI) are working a lot to increase financial inclusion. Steps like SHG-bank linkage program, use of business facilitators and correspondents, easing to Know Your Customer (KYC) norms, electronic benefit transfer, separate plan for urban financial inclusion, use of mobile technology, bank branches and ATM, opening and encouraging  ‘no-frill-accounts’ and emphasis on financial literacy have played a significant role for increasing  the use of formal sources for availing loan/credit. Measures taken by the government include opening customer service centers, credit counseling centers, Kisan credit card, Mahatma Gandhi National Rural Employment Guarantee Scheme and Aadhar  Scheme. All these renewed efforts are given more importance than the earlier ones which were general in nature. Although these measures were present earlier they need to be reframed according to the present scenario of the rural areas.2.OBJECTIVES OF THE STUDY1. To gain knowledge about the importance of financial inclusion.2. Role of mobile phones in financial inclusion.3. RESEARCH METHODOLOGYIt’s the process which is used to collect information and data that is used for the purpose of decision making . It’s a systematic, theoretical analysis of the methods applied to a field of study. This research has been fully done based on the conceptual method to prove its objectives.• SOURCES OF DATAAs the study has been made based upon the conceptual method to prove its objectives the researcher has used secondary data which are collected from journals, magazines, newspapers and websites to conduct the study.• SAMPLING TECHNIQUEAs the research is fully conducted with the help of secondary no sampling technique is used to carry out this research.             4. REVIEWV OF LITERATUREKamath (2008) attempted to understand the impact of Micro-Finance Institution (MFI) loans on daily household cash flows by analyzing cash inflow and outflow patterns of borrowers of MFI and comparing with non-MFI households. The Financial diary methodology was used to collect the data and to keep track of 11 months expenditure pattern (September 2008 to August 2009) of the households of Ramanagar area, Karnataka, India, and the Principle Component Analysis (PCA) methodology was usedto analyze the data. The findings of the study highlighted some critical issues. First, repayment of one MFI loan was done by using other MFI loans. Second, maximum repayment of MFI loan exceeded the average income of the households (as the loans were taken before September 2008). Third, none of the loans were used for productive purpose instead they are used for consumption purpose. Fourth, the households (MFI and non-MFI) did not find right option to save excess liquidity. Fifth, during the preban, indebted households spent majority of income on loan repayment, food, fuel, etc. and very little was being spent on non-food items. Whereas, non-indebted households spent their income on clothes, accessories, cosmetics, travel, etc. after the food expenditure. Sixth, there was a shift in the expenditure pattern during the post ban, indebted and non-indebted households started spending more on non-staple food such as meat, snacks, rice, jewellery, medical expenses, and travel. Seventh, the expenditure pattern of households with multiple MFI’s during post ban has provided the opportunity to buy more rice and grain. Eighth, majority of the indebted households found difficulty in repaying the loans. As a result, multiple MFI loans were taken to repay the debt. Ninth, tacit pressure was placed by loan officers on the group members to avoid potential default of loans. Tenth, MFI’s did not adopt fare mechanism for charging interest rates. Eleventh, MFI had lent money without assessing borrowers’ debt coverage ratio (credit worthiness). In short, the MFI crisis occurred due to indebtedness of the households to the multiple MFI’s, and MFI repayments came at the cost of food and travel.Radhika Dixit &MunmunGhosh (2013)5 in their study on Financial inclusion for inclusive growth of India – a study of Indian states has discussed about the meaning and the need for inclusive growth, role of financial inclusion in inclusive growth, extent of financial inclusion/ exclusion in India and the extent of diversity in Indian states with regard to financial inclusion. The study was done by using secondary data. In this study the researchers have found out that there should be a proper and equal distribution of growth opportunities and benefits in the country which will help the country to attain comprehensive growth because at present the growth opportunities are distributed at different proportions to different states some states such as Kerala, Karnataka and Maharashtra are getting higher financial inclusion whereas other states such as Gujarat, Manipur, Assam, Orissa, Bihar, Uttar Pradesh etc get very poor financial inclusion. Awareness about the financial inclusion must be created among the people and the states have to develop solutions to solve the problems related to financial inclusion.

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