Ensuring easy access to financial system to every individual is recognized as a critical element to broaden the base of economic growth of the nation. Hence financial inclusion has been conceived as the most important among ‘a hundred small steps’ to achieve the goal of inclusive growth. Committee on Financial Sector Reforms 2009 has devised financial inclusion as a focal point to further the process of financial sector reforms that have been underway in the country for long. The present study makes an attempt to examine the concept of financial inclusion, the extent of financial exclusion, the policy initiatives to achieve financial inclusion, the progress made and the challenges faced in this direction.