RESPONSIBLE BANKING PRACTICES AND FINANCIAL INCLUSION: AN EMPIRICAL STUDY OF RURAL AND SEMI-URBAN AREAS IN CHIKKAMAGALURU AND HASSAN DISTRICTS OF KARNATAKA

Abstract

Responsible banking practices represent an important shift in the banking sector towards ethical governance, transparency, customer protection and inclusive financial services. In a developing country like India, these practices play a vital role in promoting financial inclusion, particularly in rural and semi-urban areas where access to formal banking services remains a challenge. This study examines the impact of responsible banking practices on financial inclusion in Chikkamagaluru and Hassan districts of Karnataka. The study is based on primary data collected from 250 respondents through a structured questionnaire. It examines five key dimensions of responsible banking: transparency in operations, ease of access, digital banking adoption, grievance redressal services and financial literacy initiatives. The analysis focuses on how these practices influence customer confidence, banking service adoption and financial participation. The findings indicate that transparency in banking operations, simplified procedures and accessible banking services contribute to greater customer confidence. Digital banking facilities, including mobile banking and SMS alerts, encourage the use of formal banking services. However, grievance redressal mechanisms and access to formal credit require greater attention. Financial literacy initiatives also play an important role in improving customer awareness and effective utilisation of banking facilities. The study concludes that responsible banking practices contribute to financial inclusion and regional socio-economic development. Strengthening transparency, accessibility, digital banking facilities and financial awareness can help banks promote inclusive growth and sustainable development in rural and semi-urban areas.