a bank on my street corner. once i have created the deposit account and put my savings into it, i can withdraw up to that amount at will. a deposit is something that the bank owes me ; in other words, it is the bank ’ s liability. crucially, the deposit can be redeemed with immediacy. i can show up at the bank atm or at the bank teller, demanding that my money be paid back to me – show me the money! why might i need to do this? a bank deposit is the place where i save for the rainy day – my health expenses, my tuition fees, my day to day expenses. some of these needs are predictable, some random ; each time i withdraw at the atm or the teller, or write a cheque or do a wire transfer, i am demanding my money from the bank. each instance i do not demand my money back, i am rolling over the deposit to the next instance. bank deposits are thus savings that i have kept with a bank. i trust them to be safe and to be demandable at will. i am happy to earn a low interest rate on them as they provide me valuable 1 / 7 bis central bankers'speeches liquidity services, allowing me to meet my day to day and the occasional lumpy payment needs. what are bank loans? there are many depositors like me parking their savings in the bank. viewed this way, the bank is a safety vault or a storage technology. however, most of the time, the deposits are not being withdrawn and are simply being rolled over. even when withdrawn, the deposits are not being redeemed at the same time. for instance, my health expenses are not coincident with those of my neighbor. in other words, there is much saving in the bank that is lying idle. let us now bring into picture others in the economy who are potential borrowers. a bright young woman down the street has been a successful consultant, but wants to have a shot at building a new enterprise. she needs financing beyond her savings to put her bright ideas to test. there is a new construction just completed and several young couples, first - time home buyers, are looking to purchase houses there. they have some capacity to make down - payments for the properties but must avail of extra monies that they can repay over the course of their lives. an old family needs money for medical expenses to treat a long - term illness. they cannot afford to spend

person to have access to a bank account. this sarma, m. ( 2008 ) “ index of financial inclusion ” working paper no. 215, indian council for research on international economic relations. bis central bankers ’ speeches approach is based on the fundamental principle of 5a ’ s of ensuring adequacy and availability of financial services to all sections of the society through the formal financial system covering savings, credit, remittance, insurance, etc. and, at the same time, increasing awareness of such services and ensuring affordability and accessibility of the appropriate financial products through a combination of conventional and alternative delivery channels and technology enabled services and processes. against this background, we can see large variance in the level of financial inclusion across the country. the reserve bank has therefore been pursuing a multi - pronged strategy for enhancing the outreach of financial services including the delivery channels across all sections. the entire spectrum of the financial system which comprises commercial banks, regional rural banks ( rrbs ), urban co - operative banks ( ucbs ), primary agricultural credit societies ( pacs ) and post offices is, therefore, geared for this purpose. besides, self - help groups ( shgs ) and micro finance institutions ( mfis ) also meet the financial service requirements of the poorer segments. furthermore, banks have been encouraged to use a combination of strategies which include provision of new products and relaxation of processes coupled with leveraging ict for efficient handling of low ticket large volume transactions. broadly, the policy approach adapted to financial inclusion in india can be divided in two categories – the minimalist approach and the expanded approach. the minimalist approach for financial inclusion focuses on the provision of a bouquet of basic financial products and services, including thrift, credit, remittance and payment facilities for the vulnerable and financially excluded sections. banks have been urged to include products, such as, savings cum overdraft product, remittance product, pure savings product and entrepreneurial credit product while pursuing the objective of greater inclusion. the expanded approach for financial inclusion, on the other hand, focuses not only on the provision of the basic banking products but also other important ancillary financial products, such as, general insurance, health insurance, micro - pension, mutual fund, finance for affordable housing, etc. the expanded bouquet of financial inclusion would also entail focus on consumer protection and education, particularly financial literacy for the new entrants to the formal financial system. sustainable and viable financial inclusion, which would be a win