{"id":123869,"date":"2026-09-10T17:35:50","date_gmt":"2026-09-10T12:05:50","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=123869"},"modified":"2026-09-10T17:35:50","modified_gmt":"2026-09-10T12:05:50","slug":"nachiket-mor-committee","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/nachiket-mor-committee\/","title":{"rendered":"Nachiket Mor Committee, History, Recommendations, Financial Inclusion"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The <\/span><b>Nachiket Mor Committee<\/b><span style=\"font-weight: 400;\"> was set up by the <\/span><b>Reserve Bank of India (RBI)<\/b><span style=\"font-weight: 400;\"> to examine the challenges of financial inclusion in India. It focused on improving access to <\/span><b>banking, credit, insurance, payments and other financial services<\/b><span style=\"font-weight: 400;\">, especially for low-income households and small businesses. The Committee\u2019s recommendations aimed to make financial services more accessible, affordable and useful for people across the country.\u00a0<\/span><\/p>\n<h2><b>Nachiket Mor Committee History, Objectives<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span><b>Nachiket Mor Committee<\/b><span style=\"font-weight: 400;\">, officially known as the <\/span><b>Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households<\/b><span style=\"font-weight: 400;\">, was constituted by the <\/span><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/reserve-bank-of-india\/\" target=\"_blank\"><b>Reserve Bank of India (RBI)<\/b><\/a><b> in September 2013<\/b><span style=\"font-weight: 400;\"> under the chairmanship of <\/span><b>Dr. Nachiket Mor<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Background:<\/b><span style=\"font-weight: 400;\"> The committee was formed when India had expanded its banking network, but many <\/span><b>rural households, migrant workers, small businesses, informal workers and low-income groups<\/b><span style=\"font-weight: 400;\"> still had limited access to formal financial services such as banking, affordable credit, insurance and safe payment facilities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Need for the Committee:<\/b><span style=\"font-weight: 400;\"> The committee aimed to address gaps in the existing financial inclusion system and ensure that individuals and small businesses could access a wider range of formal financial services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Core Vision:<\/b><span style=\"font-weight: 400;\"> It proposed a financial system where every individual and small business could access <\/span><b>affordable, convenient and reliable financial services<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Access and Usage:<\/b><span style=\"font-weight: 400;\"> The committee stressed that financial inclusion should not be limited to simply opening bank accounts. People should also be able to <\/span><b>use financial services<\/b><span style=\"font-weight: 400;\"> such as savings, credit, insurance, pensions and payments effectively.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Economic Empowerment:<\/b><span style=\"font-weight: 400;\"> It viewed financial inclusion as more than a banking issue, linking it with <\/span><b>poverty reduction, economic participation and inclusive growth<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Nachiket Mor Committee Recommendations on Financial Inclusion<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The committee proposed a broad approach to financial inclusion that covered <\/span><b>bank accounts, payments, credit, insurance, pensions and consumer protection<\/b><span style=\"font-weight: 400;\">. Its recommendations focused on making financial services accessible and useful for underserved sections.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Universal Electronic Bank Account:<\/b><span style=\"font-weight: 400;\"> The committee recommended that every adult Indian should have a <\/span><b>Universal Electronic Bank Account (UEBA)<\/b><span style=\"font-weight: 400;\">. It was intended to serve as a basic financial account through which people could save money, receive government benefits, make payments and become part of the formal financial system.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Easy Access to Payment Points:<\/b><span style=\"font-weight: 400;\"> The committee proposed that residents should have access to payment services within a reasonable distance. It supported the use of <\/span><b>banking correspondents, mobile banking, digital channels and local service points<\/b><span style=\"font-weight: 400;\"> to reduce the difficulty faced by people in rural and remote areas.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payments Banks:<\/b><span style=\"font-weight: 400;\"> It recommended <\/span><b>Payments Banks<\/b><span style=\"font-weight: 400;\"> to provide basic savings and payment services to people who were not adequately served by traditional banks. These institutions were intended to support <\/span><b>migrant workers, low-income households, small businesses and rural or semi-urban populations<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payments Bank Services:<\/b><span style=\"font-weight: 400;\"> Payments Banks were designed to provide services such as <\/span><b>small savings accounts, remittances, digital payments, debit cards and mobile-based banking<\/b><span style=\"font-weight: 400;\">. However, they were not permitted to provide loans, keeping their focus on payments and deposit-related services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Wholesale Banks:<\/b><span style=\"font-weight: 400;\"> The committee also proposed <\/span><b>Wholesale Banks<\/b><span style=\"font-weight: 400;\"> to provide liquidity and credit support to financial institutions serving priority sectors and underserved regions. The aim was to improve the flow of funds to areas such as small businesses, agriculture and low-income groups.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Priority Sector Lending:<\/b><span style=\"font-weight: 400;\"> It recommended reforms in <\/span><b>Priority Sector Lending (PSL)<\/b><span style=\"font-weight: 400;\"> so that credit would reach genuinely underserved sectors rather than merely helping banks meet fixed targets. The focus was on making PSL more flexible, better monitored and more effective.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Complete Range of Financial Products:<\/b><span style=\"font-weight: 400;\"> The committee stressed that financial inclusion should go beyond bank accounts. Low-income households may also need <\/span><b>affordable credit, insurance, pension products, safe remittance services, emergency savings and financial advice<\/b><span style=\"font-weight: 400;\"> to manage different financial risks.<\/span><\/li>\n<\/ul>\n<p><b>Also Read : <\/b><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/banking-system-in-india\/\" target=\"_blank\"><b>Banking System in India<\/b><\/a><\/p>\n<h2><b>Key Recommendations of the Nachiket Mor Committee<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span><b>Nachiket Mor Committee recommendations<\/b><span style=\"font-weight: 400;\"> covered both the structure of the banking system and the way financial services should be delivered and regulated.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Differentiated Banking:<\/b><span style=\"font-weight: 400;\"> The committee supported a banking structure in which institutions could have different roles based on their functions. This included specialised institutions such as <\/span><b>Payments Banks<\/b><span style=\"font-weight: 400;\"> and <\/span><b>Wholesale Banks<\/b><span style=\"font-weight: 400;\"> to meet the needs of different sections of the economy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Small Finance Banks:<\/b><span style=\"font-weight: 400;\"> The committee recommended the idea of <\/span><b>Small Finance Banks<\/b><span style=\"font-weight: 400;\"> to improve credit access for <\/span><b>small businesses and low-income households<\/b><span style=\"font-weight: 400;\">. This became an important part of the differentiated banking approach in India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Greater Competition:<\/b><span style=\"font-weight: 400;\"> It supported wider participation of non-bank players in financial services to encourage <\/span><b>competition, innovation and better service delivery<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Digital Payment Infrastructure:<\/b><span style=\"font-weight: 400;\"> The committee highlighted the importance of affordable, reliable and widely available payment systems. It supported the development of <\/span><b>interoperable digital payment infrastructure<\/b><span style=\"font-weight: 400;\"> to reduce transaction costs and make formal financial services easier to use.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Credit for Small Businesses:<\/b><span style=\"font-weight: 400;\"> The committee recognised that small businesses often struggle to obtain formal loans because of limited collateral and documentation. It therefore supported measures such as <\/span><b>cash-flow-based lending and improved credit information systems<\/b><span style=\"font-weight: 400;\"> to improve access to formal credit.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Customer-Centric Regulation:<\/b><span style=\"font-weight: 400;\"> The committee proposed moving towards a <\/span><b>customer-centric regulatory approach<\/b><span style=\"font-weight: 400;\"> instead of focusing only on banks and institutions. It emphasised proportional regulation, where rules would reflect the nature and risk profile of different financial institutions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Consumer Protection:<\/b><span style=\"font-weight: 400;\"> The committee stressed that financial inclusion should be supported by strong <\/span><b>consumer protection<\/b><span style=\"font-weight: 400;\">. It highlighted the need for responsible lending, transparent products, simple communication, effective grievance redressal and suitable financial products for low-income households.<\/span><\/li>\n<\/ul>\n<p><b>Also Read : <\/b><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/financial-institutions-in-india\/\" target=\"_blank\"><b>Financial Institutions in India<\/b><\/a><\/p>\n<h2><b>Significance of the Nachiket Mor Committee for Indian Banking<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span><b>Nachiket Mor Committee<\/b><span style=\"font-weight: 400;\"> played an important role in changing the way financial inclusion was viewed in India. Instead of measuring inclusion only through the number of bank branches or accounts, it placed greater emphasis on <\/span><b>access, usage, financial security and a wider range of financial products<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Expansion of <\/b><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/financial-inclusion\/\" target=\"_blank\"><b>Financial Inclusion<\/b><\/a><b>:<\/b><span style=\"font-weight: 400;\"> Its recommendations influenced later developments such as <\/span><b>Jan Dhan accounts, Aadhaar-enabled financial services, Direct Benefit Transfer, banking correspondents and digital payments<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Growth of<\/b><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/differentiated-banks\/\" target=\"_blank\"><b> Differentiated Banking<\/b><\/a><b>:<\/b><span style=\"font-weight: 400;\"> The committee\u2019s ideas contributed to the development of specialised banking models, particularly <\/span><b>Payments Banks<\/b><span style=\"font-weight: 400;\">, which expanded the range of institutions serving underserved customers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Better Government Benefit Delivery:<\/b><span style=\"font-weight: 400;\"> Wider access to bank accounts and digital payment systems helped strengthen the delivery of <\/span><b>government benefits and transfers<\/b><span style=\"font-weight: 400;\"> through formal financial channels.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Greater Savings and Formalisation:<\/b><span style=\"font-weight: 400;\"> Bringing more households and small businesses into the formal financial system can encourage <\/span><b>savings mobilisation, formal payments and reduced dependence on informal sources of finance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Support for Small Businesses:<\/b><span style=\"font-weight: 400;\"> By focusing on better credit access and improved financial services, the committee aimed to help small businesses participate more effectively in the formal economy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Focus on Financial Security:<\/b><span style=\"font-weight: 400;\"> The committee recognised that inclusion must also provide protection against financial risks through <\/span><b>insurance, pensions, emergency savings and responsible credit<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Long-Term Impact:<\/b><span style=\"font-weight: 400;\"> The committee\u2019s approach helped shape India\u2019s broader financial inclusion framework and supported the movement towards the <\/span><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/jam-trinity\/\" target=\"_blank\"><b>JAM Trinity<\/b><\/a><b> &#8211; Jan Dhan, Aadhaar and Mobile<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Nachiket Mor Committee Challenges<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Uneven Access and Usage:<\/b><span style=\"font-weight: 400;\"> Despite wider banking coverage, some rural households, low-income groups, migrant workers and small businesses still face difficulties in accessing and regularly using formal financial services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Limited Access to Formal Credit:<\/b><span style=\"font-weight: 400;\"> Small businesses and low-income borrowers continue to face challenges related to <\/span><b>collateral, documentation and credit assessment<\/b><span style=\"font-weight: 400;\">, making it difficult to obtain affordable formal loans.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Digital Divide:<\/b><span style=\"font-weight: 400;\"> Differences in <\/span><b>digital literacy, internet connectivity and access to digital devices<\/b><span style=\"font-weight: 400;\"> can limit the effective use of digital banking and payment services, particularly in underserved areas.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fraud and Consumer Risks:<\/b><span style=\"font-weight: 400;\"> The growing use of digital financial services has increased concerns related to <\/span><b>fraud, mis-selling, over-indebtedness and unsuitable financial products<\/b><span style=\"font-weight: 400;\">, making strong consumer protection important.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Challenges for Payments Banks:<\/b><span style=\"font-weight: 400;\"> Payments Banks have faced difficulties in developing sustainable business models while serving low-income customers and providing affordable payment and savings services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Need for Greater Financial Security:<\/b><span style=\"font-weight: 400;\"> Financial inclusion needs to go beyond bank accounts and payments by ensuring wider access to <\/span><b>credit, insurance, pensions, emergency savings and financial advice<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Recent Developments based on Nachiket Mor Committee<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Wider Financial Inclusion:<\/b><span style=\"font-weight: 400;\"> The approach suggested by the Nachiket Mor Committee has influenced the expansion of financial inclusion in India by shifting the focus from merely opening accounts to ensuring meaningful access and regular usage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Growth of Basic Bank Accounts:<\/b><span style=\"font-weight: 400;\"> Initiatives such as <\/span><b>Pradhan Mantri Jan Dhan Yojana (PMJDY)<\/b><span style=\"font-weight: 400;\"> have significantly expanded access to basic bank accounts, particularly among previously underserved sections.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Expansion of Digital Payments:<\/b> <b>UPI, Aadhaar-enabled payment systems, mobile banking and <\/b><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/direct-benefit-transfer\/\" target=\"_blank\"><b>Direct Benefit Transfer<\/b><\/a><b> (DBT)<\/b><span style=\"font-weight: 400;\"> have strengthened the digital financial ecosystem and improved access to formal financial services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Greater Role of Differentiated Banks:<\/b><span style=\"font-weight: 400;\"> The Committee&#8217;s recommendation for differentiated banking models contributed to the introduction of <\/span><b>Payments Banks and Small Finance Banks<\/b><span style=\"font-weight: 400;\">, aimed at serving specific customer groups and financial needs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Continuing Inclusion Gaps:<\/b><span style=\"font-weight: 400;\"> While access has improved considerably, challenges remain in ensuring <\/span><b>affordable credit, regular usage, financial literacy, digital connectivity and consumer protection<\/b><span style=\"font-weight: 400;\">, especially for vulnerable and underserved groups.<\/span><\/li>\n<\/ul>\n<h2><b>Nachiket Mor Committee Way Forward<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Focus on Meaningful Usage:<\/b><span style=\"font-weight: 400;\"> Financial inclusion should move beyond account opening and focus on <\/span><b>regular and useful access<\/b><span style=\"font-weight: 400;\"> to savings, credit, payments, insurance and pension services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Improve Affordable Credit:<\/b><span style=\"font-weight: 400;\"> Better credit assessment, cash-flow-based lending and stronger credit information systems can help small businesses and low-income borrowers obtain formal credit more easily.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Strengthen Digital Infrastructure:<\/b><span style=\"font-weight: 400;\"> Improving <\/span><b>rural connectivity, digital access and financial literacy<\/b><span style=\"font-weight: 400;\"> can help more people use digital financial services safely and effectively.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Enhance Consumer Protection:<\/b><span style=\"font-weight: 400;\"> Financial institutions should ensure <\/span><b>transparent products, responsible lending, simple communication and effective grievance redressal<\/b><span style=\"font-weight: 400;\"> to protect customers from fraud and mis-selling.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Expand Insurance and Pension Coverage:<\/b><span style=\"font-weight: 400;\"> Financial inclusion should provide low-income households with access to suitable <\/span><b>insurance, pension and emergency savings products<\/b><span style=\"font-weight: 400;\"> to improve their overall financial security.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Strengthen Digital Safety:<\/b><span style=\"font-weight: 400;\"> Greater attention should be given to <\/span><b>data privacy, cybersecurity and protection against digital fraud<\/b><span style=\"font-weight: 400;\"> as financial services become increasingly technology-driven.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Nachiket Mor Committee was formed by RBI in 2013 to strengthen financial inclusion through universal bank accounts, affordable credit, digital payments, insurance and pensions for all.<\/p>\n","protected":false},"author":29,"featured_media":123875,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[786],"tags":[5104,5105,10161],"class_list":["post-123869","post","type-post","status-publish","format-standard","has-post-thumbnail","category-general-studies","tag-economy","tag-economy-notes","tag-nachiket-mor-committee","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/123869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=123869"}],"version-history":[{"count":3,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/123869\/revisions"}],"predecessor-version":[{"id":123878,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/123869\/revisions\/123878"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/123875"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=123869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=123869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=123869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}