Mainstreaming the financial inclusion agenda in India - lessons from the genesis and growth of Canara Bank,

Abstract

Financial Inclusion has always been a much touted policy agenda since India’s Independence. The State played a key role through promoting cooperative credit societies, nationalising big private sector banks and facilitating several supply side measures to ease access to credit. Post 90s, the accent was more on demand led private initiatives through self help groups and microfinance institutions. Today, there seems to be a policy turn again towards formal institutions like Banks. In 2015, in a rare move, the Reserve Bank of India granted licenses to differentiated banks like the Small Finance Banks and Payments Banks. Given these policy reversals, the state seems to be grappling with implementing a proven agenda towards mainstreaming financial inclusion through banks. To this end, we turn back to a period of Indian banking history to derive lessons from the trajectories of the indigenous joint stock banking companies, often termed swadeshi banks that spontaneously emerged, especially in southern India, at the turn of the 20th century.