Revision notes · Banking and competitive exams
Financial inclusion: schemes, technology and the latest figures
What it means, the main schemes, the 2026 numbers, and 50 practice questions.
Financial inclusion = banking for everyone, anytime, anywhereWhat is financial inclusion?
Financial inclusion means every citizen, especially the poor, rural and unbanked, can get affordable banking, savings, credit, insurance, pension and payment services.
Why it matters
- Ends dependence on moneylenders
- Lets government send subsidies directly to bank accounts (DBT)
- Builds savings and access to credit
Main barriers
- Low financial literacy and trust
- Rural distance and poor connectivity
- Low or irregular income
- Documents (KYC) and digital skills
Key schemes and measures
| Scheme or measure | Year | What it does | Key figure |
|---|---|---|---|
| PM Jan Dhan Yojana (PMJDY) | 2014 | Zero-balance account, RuPay card, ₹2 lakh accident cover, overdraft up to ₹10,000 | 59.09 crore accounts (Aug 2026) |
| JAM trinity | — | Jan Dhan (accounts), Aadhaar (identity), Mobile (access). Backbone of DBT | — |
| BSBDA | — | Basic Savings Bank Deposit Account: no minimum balance, limited free transactions | — |
| Business Correspondent (BC) model | — | Bank agents in villages open accounts and handle deposits, withdrawals and remittance | — |
| Payments banks | 2015 licence | Accept deposits up to ₹2 lakh per customer, issue debit cards, remit money. Cannot give loans | e.g. India Post Payments Bank, Airtel Payments Bank |
| Small finance banks (SFBs) | — | Full banking, including loans, for small farmers, MSMEs and low-income groups | e.g. AU, Ujjivan, Jana, Equitas |
| Priority sector lending (PSL) | — | Banks must lend a set share of credit to priority sectors | 40% of ANBC for domestic banks |
| PM Mudra Yojana | 2015 | Small business loans: Shishu (up to ₹50,000), Kishore (up to ₹5 lakh), Tarun (up to ₹10 lakh) | — |
| Atal Pension Yojana (APY) | 2015 | Pension for unorganised workers | ₹1,000–5,000 a month |
| PM Suraksha Bima Yojana (PMSBY) | 2015 | Accident insurance | ₹20 a year, ₹2 lakh cover |
| PM Jeevan Jyoti Bima Yojana (PMJJBY) | 2015 | Life insurance | ₹436 a year, ₹2 lakh cover |
| Stand-Up India | 2016 | Loans for SC/ST and women entrepreneurs | ₹10 lakh to ₹1 crore |
Older measures you may have missed
| Lead Bank Scheme | 1969. Each district has a lead bank that coordinates credit and banking. |
| No-frills accounts | 2005. Basic accounts with minimal requirements, the forerunner of BSBDA. |
| Kisan Credit Card (KCC) | 1998. Short-term credit for farmers. |
| SHG–bank linkage | 1992, by NABARD. Lends to self-help groups through banks. |
Technology behind it
| Technology | What it does |
|---|---|
| UPI | Instant mobile payments using QR codes |
| Aadhaar and e-KYC | Quick, paperless account opening |
| AEPS | Biometric banking through Business Correspondents |
| USSD (*99#) | Banking on any phone, without internet |
| UPI 123PAY | UPI payments on feature phones |
| Micro-ATMs | Cash and account services in villages |
| Bharat BillPay | Centralised bill payments |
| Digital Rupee (e₹) | RBI’s central bank digital currency (retail pilot since Dec 2022) |
Latest figures (2026)
Most important points
- Financial inclusion = affordable financial services for all
- PMJDY turned 12 on 28 August 2026
- JAM = Jan Dhan + Aadhaar + Mobile
- Payments banks cannot give loans
- Priority sector lending = 40% of ANBC for domestic banks
- Mudra loans: Shishu, Kishore, Tarun
- PMSBY ₹20 a year, PMJJBY ₹436 a year, both with ₹2 lakh cover
- e₹ (Digital Rupee) is RBI’s CBDC
- Dormant accounts are a key challenge
- FI-Index is published once a year (July)
50 practice MCQs
Try each question first, then open the answer.
Basics of financial inclusion (Q1–Q10)
Q1. Financial Inclusion refers to:
- a) Opening Demat accounts for traders
- b) Providing loans to large industries
- c) Providing affordable financial services to all sections of society
- d) Providing insurance only
Answer: C Financial inclusion ensures access to useful financial services for everyone.
Q2. The main objective of Financial Inclusion is:
- a) Increase import and export
- b) Enhance profits of banks only
- c) Ensure access to banking and reduce financial inequality
- d) Promote cryptocurrency
Answer: C Goal is inclusive growth and access to formal finance.
Q3. Which section is mostly targeted by Financial Inclusion?
- a) Corporate bodies
- b) Poor and unbanked population
- c) NRIs
- d) High net worth individuals
Answer: B
Q4. Financial Exclusion means:
- a) Too many people have bank accounts
- b) People are unable to access formal financial services
- c) Loan recovery
- d) Digital fraud
Answer: B
Q5. Which of the following is a financial inclusion service?
- a) Casino gaming
- b) Savings account, insurance, remittance, pension
- c) Election services
- d) Agriculture procurement
Answer: B
Q6. Which organisation drives financial inclusion policies in India?
- a) TRAI
- b) SEBI
- c) RBI
- d) ISRO
Answer: C RBI sets policies for banking access.
Q7. The biggest barrier to financial inclusion in rural India is:
- a) High GDP
- b) Low financial literacy
- c) Excess internet
- d) Overbanking
Answer: B
Q8. Financial inclusion improves economic development mainly by:
- a) Increasing inflation
- b) Reducing digital payments
- c) Increasing savings and access to credit
- d) Reducing subsidies
Answer: C
Q9. Which of the following is NOT a barrier to financial inclusion?
- a) Lack of documents
- b) Low awareness
- c) Poor connectivity
- d) High education level
Answer: D
Q10. National Financial Inclusion Strategy in India focuses on:
- a) Nuclear energy
- b) Tourism development
- c) Access, usage and quality of financial services
- d) Road construction
Answer: C
Government and RBI initiatives (Q11–Q25)
Q11. PMJDY was launched in:
- a) 2008
- b) 2010
- c) 2014
- d) 2016
Answer: C Launched by PM Narendra Modi on 28 August 2014.
Q12. The accident insurance coverage under PMJDY is:
- a) ₹1 lakh
- b) ₹50,000
- c) ₹2 lakh
- d) ₹5 lakh
Answer: C
Q13. Overdraft facility under PMJDY is up to:
- a) ₹5,000
- b) ₹10,000
- c) ₹20,000
- d) ₹50,000
Answer: B
Q14. Which card is issued under PMJDY accounts?
- a) Mastercard
- b) RuPay Debit Card
- c) Visa Platinum
- d) Amex
Answer: B
Q15. JAM Trinity stands for:
- a) Joint Account Management
- b) Jan Suraksha, Aadhaar, MSME
- c) Jan Dhan, Aadhaar, Mobile
- d) Janani, Aadhaar, Mudra
Answer: C JAM enables direct benefit transfer.
Q16. AEPS stands for:
- a) Automatic Electronic Payment Service
- b) Aadhaar Encrypted Payment Segment
- c) Aadhaar Enabled Payment System
- d) Aadhaar Easy Pay Service
Answer: C
Q17. Business Correspondent (BC) model mainly helps in:
- a) Export financing
- b) Last-mile banking delivery in rural areas
- c) Corporate lending
- d) ATM calibration
Answer: B
Q18. PSL (Priority Sector Lending) requires banks to allocate:
- a) 10% of credit
- b) 20% of credit
- c) 40% of Adjusted Net Bank Credit
- d) 50% of assets
Answer: C
Q19. BSBDA stands for:
- a) Basic Savings Business Development Account
- b) Basic Secondary Bank Deposit Account
- c) Basic Savings Bank Deposit Account
- d) Bank Savings and Bond Deposit Account
Answer: C
Q20. PM Mudra Yojana provides loans up to:
- a) ₹2 lakh
- b) ₹5 lakh
- c) ₹10 lakh
- d) ₹50 lakh
Answer: C
Q21. Under Mudra scheme, loan category up to ₹50,000 is called:
- a) Kishore
- b) Tarun
- c) Prosper
- d) Shishu
Answer: D
Q22. PMJJBY provides insurance coverage of:
- a) ₹50,000
- b) ₹1 lakh
- c) ₹2 lakh
- d) ₹10 lakh
Answer: C
Q23. PMSBY annual premium is:
- a) ₹100
- b) ₹350
- c) ₹436
- d) ₹20
Answer: D
Q24. Small Finance Banks mainly serve:
- a) Large industries
- b) MSME, small farmers, low income groups
- c) Government ministries
- d) Foreign investors
Answer: B
Q25. Payments Banks cannot:
- a) Accept deposits
- b) Provide remittance services
- c) Issue ATM/Debit cards
- d) Give loans or credit cards
Answer: D
Digital financial inclusion (Q26–Q40)
Q26. UPI stands for:
- a) United Payment Institute
- b) Unified Payments Interface
- c) Universal Payment Integration
- d) Uninterrupted Payment Interface
Answer: B
Q27. USSD banking works using code:
- a) *222#
- b) *55#
- c) *99#
- d) *08#
Answer: C
Q28. DigiLocker is used for:
- a) Online gaming
- b) Secure digital document storage & verification
- c) Trading commodities
- d) Currency conversion
Answer: B
Q29. AEPS allows transactions based on:
- a) Signature
- b) Password
- c) Biometric and Aadhaar authentication
- d) OTP only
Answer: C
Q30. Bharat BillPay system is used for:
- a) Printing cheques
- b) Centralized bill payment system
- c) Locker management
- d) ATM security
Answer: B
Q31. Which system enables UPI interoperability for feature phones?
- a) FASTag
- b) IMPS
- c) UPI 123PAY
- d) NACH
Answer: C
Q32. CBDC launched by RBI is known as:
- a) Crypto Rupee
- b) RBI Token
- c) Digital Rupee (e₹)
- d) Unified Rupee
Answer: C
Q33. Digital Rupee improves Financial Inclusion by:
- a) Increasing fees
- b) Enabling secure, traceable, cashless transactions
- c) Removing banks
- d) Closing rural branches
Answer: B
Q34. Which payment method requires no smartphone & no internet?
- a) UPI QR
- b) USSD Banking (*99#)
- c) NFC
- d) Debit card
Answer: B
Q35. Micro ATMs are mainly used by:
- a) Film industry
- b) College students
- c) Business Correspondents in villages
- d) Software companies
Answer: C
Q36. AEPS helps especially:
- a) Urban salaried employees
- b) Rural biometric-based transactions
- c) Railway bookings
- d) Cryptocurrency trading
Answer: B
Q37. One major challenge of digital inclusion is:
- a) Too many smartphones
- b) Cyber fraud and digital illiteracy
- c) High deposit rates
- d) Increased foreign travel
Answer: B
Q38. FIITF stands for:
- a) Foreign Investment and Treasury Fund
- b) Financial Inclusion Technology Fund (FIT Fund)
- c) Financial Insurance Trust Fund
- d) Financial India Technology Federation
Answer: B
Q39. NACH is related to:
- a) UPI switch
- b) Loan underwriting
- c) Automated clearing of recurring payments (ECS replacement)
- d) Mobile wallets
Answer: C
Q40. Aadhaar seeding in accounts is crucial for:
- a) Higher interest rate
- b) Direct Benefit Transfer (DBT)
- c) RTGS settlement
- d) Export financing
Answer: B
Financial literacy and advanced concepts (Q41–Q50)
Q41. Financial Literacy refers to:
- a) Writing skills
- b) Ability to understand and manage money and financial products
- c) English speaking
- d) Budget preparation only
Answer: B
Q42. The committee on Financial Inclusion headed by:
- a) Rangarajan
- b) Dr. C. Rangarajan (2008)
- c) Raghuram Rajan
- d) Amartya Sen
Answer: B
Q43. Banking correspondent model was recommended by which Committee?
- a) Nachiket Mor Committee
- b) Damodaran Committee
- c) Rangarajan Committee
- d) Narasimham Committee
Answer: C
Q44. Nachiket Mor Committee recommended:
- a) Payment banks
- b) Microfinance ban
- c) Trade finance rules
- d) Foreign bank mergers
Answer: A
Q45. FI Literacy centres are known as:
- a) Money Offices
- b) Digital E-centres
- c) Financial Literacy and Credit Counseling Centres (FLCCs)
- d) FI Monitoring Centres
Answer: C
Q46. Major disadvantage of financial exclusion:
- a) Easy loan process
- b) Increase in informal lending and high interest rates
- c) More digital payments
- d) Increase in banking jobs
Answer: B
Q47. Stand-Up India provides loans mainly to:
- a) Farmers only
- b) MSME workers only
- c) SC/ST and Women entrepreneurs
- d) Defence personnel only
Answer: C
Q48. Which scheme provides pension benefits to unorganized workers?
- a) PMJDY
- b) APY – Atal Pension Yojana
- c) PM Garib Kalyan
- d) Swabhimaan
Answer: B
Q49. Financial Independence and empowerment is the goal of:
- a) Corporate governance
- b) Financial inclusion and financial literacy
- c) NPAs
- d) Treasury management
Answer: B
Q50. A successful financial inclusion ecosystem requires:
- a) Banks only
- b) Govt only
- c) RBI only
- d) All stakeholders – Govt + Banks + Regulators + Fintech + Public
Answer: D Financial inclusion requires collective effort.