Understanding Credit Inclusion in India

Credit inclusion, also known as financial inclusion regarding credit, is a critical aspect of a country's economic development. It aims to ensure that individuals, especially those with low income or no formal credit history, have access to affordable and appropriate credit products and services. This access is vital for various reasons:

• It helps individuals meet unexpected expenses.
• It enables them to invest in education, health, or small businesses.
• It allows them to build a credit history, which is essential for accessing larger loans in the future (like home or vehicle loans).

In India, enhancing credit inclusion has been a focus area for policymakers and financial institutions to bring more people into the formal banking system and reduce reliance on informal, high-cost credit sources.

About the Unnati Credit Card

The 'Unnati Credit Card' was specifically designed as a step towards greater credit inclusion. It targets individuals who might find it difficult to get a regular credit card because they don't have a credit score or a sufficient income history that satisfies standard eligibility criteria.

A key feature of the Unnati Credit Card is that it is offered against a Fixed Deposit (FD). This means the customer needs to have a Fixed Deposit with the bank, and the credit limit of the card is typically a percentage of this FD amount. This mechanism provides security for the bank and allows individuals without a credit history to start using and building one responsibly.

Which Major Bank Launched Unnati Credit Card in 2017?

In 2017, a major Indian bank launched the Unnati Credit Card to promote credit inclusion by offering a credit card against a Fixed Deposit. This initiative was significant as it opened up possibilities for a segment of the population previously excluded from formal credit products.

The bank responsible for launching the Unnati Credit Card is the State Bank of India (SBI).

SBI, being the largest public sector bank in India, plays a crucial role in financial inclusion initiatives across the country. The Unnati Credit Card was one such product aimed at expanding access to credit.

Let's look at the options provided:

• SBI
• ICICI Bank
• Axis Bank
• HDFC Bank

Based on the launch in 2017 for credit inclusion with the Unnati Credit Card, SBI is the bank that introduced this product.

Revision Table: Key Bank Products for Inclusion

Additional Information on Credit Cards Against FD

Offering credit cards against Fixed Deposits is a common practice used by banks to mitigate risk while providing credit access. It's often used for:

• Individuals with no credit history (new to credit).
• Individuals with a poor credit score looking to rebuild it.
• Students or young adults who are starting their financial journey.

This type of card helps the user build a positive credit history if managed responsibly (paying bills on time). The FD serves as security, and if the cardholder defaults on payments, the bank can recover the dues from the FD.