Financial Inclusion of BPL Households in Delhi Slums: An Analysis of Government Policies and Regulatory Frameworks

Abstract

Financial inclusion has emerged as a critical strategy for poverty reduction and economic empowerment of Below Poverty Line (BPL) households in India's urban slums. This study examines the effectiveness of government policies and regulatory frameworks in enhancing financial inclusion among BPL households in Delhi's slums, with particular focus on Scheduled Commercial Banks' initiatives. The research employs a mixed-method approach, analyzing data from 750 Delhi slums housing 3.5 lakh families and 20 lakh people representing 28% of Delhi's population. Key findings reveal that while 54.97 crore PMJDY accounts have been opened with deposits of Rs. 2,52,750 crores, approximately 11.30 crore accounts remain inoperative with Rs 14,750 crore balance. The study demonstrates that despite significant policy interventions including Jan Dhan Yojana, MUDRA schemes, and digital payment initiatives, substantial gaps persist in meaningful financial inclusion. Results indicate that while bank account penetration has increased dramatically from 58% unbanked population in 2013-14 to 3.69% by 2022-23, usage patterns remain suboptimal with only 82.35% accounts being operative. The research concludes that structural barriers, limited financial literacy, and inadequate service delivery mechanisms continue to impede comprehensive financial inclusion despite progressive policy frameworks.