India’s endeavour of achieving Millennium Development Goals (MDG) primarily needs support of a robust financial system, by ensuring inclusion and active participation of all section of population. In this context, the term ‘Financial Inclusion’ is nowadays become globally widespread. Financial inclusion may be understood with insight about the situation of its exclusion; wherein an individual is deprived of state’s mainstream financial system, exposing deprived population to high cost debt exacerbating the poverty cycle. Financial Inclusion has now been accepted globally as the primary and most critical component for sustainable development of a nation. It was however never part of the Millennium Development Goals (MDG 2000). It took long time to arise as crucial agenda of developing countries, including at G20 in 2011. Subsequently in 2012, the alliance for Financial Inclusion (led by central banks of 35 emerging & developing countries) tendered commitment for financial inclusion. The level of inclusiveness in India was at dismal for a prolonged period after independence. Indian government had traditionally established Banks/FI to provide formal financial services. Apex FIs (viz. NABARD, IDBI and SIDBI) have well supported nation building in various ways, but government had miserably failed to address the necessity of financial inclusiveness in this developing nation. As per India’s Census 2011 data (population 1.22 billion), 65% of adults were not having access to formal financial system. Another report of World Bank reveals that merely 9% Indian adults had availed credit from banking system. This level of exclusion of a larger population had been accentuated as serious hindrance to the economic progress of India. Financial inclusion has gradually emerged as obligatory medium to implement various policies for achieving MDGs. During the last 20 years, Indian government had framed diverse strategies relying on the unwavering support of banking channels. India has traversed a long journey to ensure inclusiveness across the country. This article dealt with key policies, implemented through banking system that has made significant impact towards inclusive & sustainable development in India.