Feasibility of Financial Inclusion Mission in India Under Reform and Global Financial Crisis

Abstract

For last one and half of a decade the Indian financial system has been trying to boost up the link between the real and financial sectors by means of the financial inclusion mission. The mission, among others, needs a rising branch expansion supported by rising number of employees in all categories. The present chapter, thus, seeks to test three hypotheses. Hypothesis I seeks to measure the concentration ratios of different classes of employees over the period, 1985–2012 which covers pre and post financial sector reforms in India and pre and post phases of global financial crisis. Hypothesis II seeks to test whether there are any significant changes in the average values of number of employees in all categories and Hypothesis III seeks to link the financial inclusion by means of branch expansion with different categories of bank employees across the branches and population. It is observed that concentration of bank employees in India has gone down after the reform process started affecting the clerical and subordinates staffs. With respect to the second hypothesis, it is inferred that the reform programme, in over all sense, has not benefitted to the bank employees; rather produced a disparity among Clerical and Subordinate Classes with the Officers’ Class. Again financial crisis has badly affected the non officer classes with similar kind of good effect upon the Officers’ Class. Lastly, third hypothesis concludes that branch growth is cointegrated in pair way to three series which are growth of officer per branch, growth of subordinates per branch and growth of population per officer. Hence, financial inclusion mission cannot be made feasible mainly by a corresponding growth in the officer class among the bank employees.