⇒ Financial Inclusion is an important priority of the Government. The objective of Financial Inclusion is to extend financial services to the large hitherto unserved population of the country to unlock its growth potential. Following are the important initiatives taken by the Government to achieve greater financial inclusion:
- Expansion of Bank Branch Network.
- Swabhimaan Scheme
- Direct Benefit Transfer
- PAHAL Scheme
- Pradhan Mantri Jan-Dhan Yojana (PMJDY): PMJDY was formally launched on 28th August, 2014. The Yojana envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy,access to credit, insurance &pension. PMJDY has been implemented by banks successfully. As against the estimated target of opening 10 crore accounts, as on 28.10.2015, 19.02 crore accounts have been opened out of which 11.58 crore accounts are in ru-ral areas and 7.44 crore in urban areas.
- Simplified Branch authorization.
- New Pension System
New Pension System
⇒ Pension Plans provide financial security & stability during old age when people don’t have a regular source of income. To provide social security to more citizens the Government of India has started the National Pension System. Government of India established Pension Fund Regulatory & Development Authority (PFRDA) on 10th October 2013 to develop & regulate pension sector in the country. The National Pension System (NPS) was launched in 1st January,2004 with the objective of providing retirement income to all the citizens. With effect from 1st may 2009, NPS has been provided for all citizens of the country including the un-organised sector workers on voluntary basis.
⇒ Additionally, Central Government launched a co-contributory pension scheme, “Swavalamban Scheme” in the Union Budget of 2010-11, under which the Government will contribute a sum of Rs. 1,000 to each eligible NPS subscriber who contributes a minimum of Rs. 1,000 & maximum Rs. 12,000 per annum.
⇒ The NPS is structured in 2 tiers. A Tier-1 account is a basic retirement pension account available to all citizens from 1st May 2009. It does not permit withdrawal of funds before retirement. A Tier-2 account is a prospective payment system account that permits some withdrawal of pension prior to retirement under exceptional circumstances, usually related to the provision of health care.