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Banking which caters specially to
the development needs of poor
Objectives of Social Banking
 To provide credit facilities to the small farmers ,small

traders, cottage industries and s...
Major Social banking schemes
 Lead Bank Scheme
 Service Area Approach(SAA)
 Village Adoption Scheme
 Differential Rate...
LEAD
BANK
SCHEME
Introduced in
1969
What is Lead
Bank?

A bank in each district is
selected as a key instrument

Banks

A bank which
co-ordinate the
banking
i...
Activities of a lead bank
1.
2.
3.

4.
5.
6.

To survey the credit needs of the district
To evolve a credit action plan fo...
7. Helps in marketing the agricultural and industrial

products
8. Recruiting and training staff, for offering advice to
s...
To bring about an orderly and planned
development of rural and semi-urban areas of the
country
Scheduled Banks

Semi Urban Banks

Rural banks

Allocate Specific Villages

Service
Area
Stages of SAA
Identification of the service area for each bank

Survey for assessing the lending potential of villagers

P...
Advantages of SAA
 Improving economic status of people
 Helping banks by focus on small areas
 Making lending activity ...
Development of selected villages in an integrated manner
Main Activities
 Meeting credit need of poor
 Watershed development/livelihood based activities
 In tribal dominant vil...
 Marketing related intervention

 Environmental/ecological related interventions
 Value chain management
 Implementati...
Introduced in March 1972

Provide concessional rate of interest to low income
group for productive purposes
Features of DRI Scheme
 Lending at lower rate.
 Main objective is upliftment of backward strata in the

society.
 Banks...
Introduced in 1967-68

To provide adequate
and timely financial
support at reasonable
rate to priority sectors
 Agriculture
 Small Scale

Industries
 Small Road
and Water
operators
 Irrigation……
………
RBI stipulates banks to provide credit under
Priority sector as follows

Banks

Domestic
Banks

Foreign
Banks

40%

32%

W...
Government give much importance to Priority
Sector Lending
Micro credit is the
provision of thrift,
credit and other
financial services and
products of very
small amount to the
poor...
Introduced by Nobel Laureate and
founder of Grameen Bank
Muhammad Yunus
“The poor are like “bonsai", which could have grow...
In India Micro Finance is linked to
Self Help Groups(SHG)
 A SHG is a registered or unregistered group of micro

entrepre...
Functioning of SHG-bank linkage program
1.
2.
3.

4.
5.

6.

NGOs and banks interact with the poor, especially
women, to f...
7. Empowerment is achieved through group

dynamics, decision-making, and funds management.
8. When the pooled thrift grows...
Thank You
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Social banking

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It is about banking, mainly in India

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Transcript of "Social banking"

  1. 1. Banking which caters specially to the development needs of poor
  2. 2. Objectives of Social Banking  To provide credit facilities to the small farmers ,small traders, cottage industries and self employed persons.  To give priority to industries which produce essential goods  To provide financial resources for the welfare objectives.
  3. 3. Major Social banking schemes  Lead Bank Scheme  Service Area Approach(SAA)  Village Adoption Scheme  Differential Rate of Interest Scheme(DIR Scheme)  Priority sector lending  Micro Finance via SHG-Bank Linkage Programme
  4. 4. LEAD BANK SCHEME Introduced in 1969
  5. 5. What is Lead Bank? A bank in each district is selected as a key instrument Banks A bank which co-ordinate the banking institutions in the district Acts as a ‘consortium leader’ Lead bank Credit Agencies
  6. 6. Activities of a lead bank 1. 2. 3. 4. 5. 6. To survey the credit needs of the district To evolve a credit action plan for the district To work with the government in the development process To make sure that small borrowers are served effectively by the business Assisting primary lending services Survey the resources and potential for banking development in the district
  7. 7. 7. Helps in marketing the agricultural and industrial products 8. Recruiting and training staff, for offering advice to small borrowers and farmers, in the priority sectors. 9. Setting the district consultative Committee in coordination with other banks and financial institutions
  8. 8. To bring about an orderly and planned development of rural and semi-urban areas of the country
  9. 9. Scheduled Banks Semi Urban Banks Rural banks Allocate Specific Villages Service Area
  10. 10. Stages of SAA Identification of the service area for each bank Survey for assessing the lending potential of villagers Preparation of annual credit plans for each service area Co-ordination of credit institution and various agencies Continuous monitoring
  11. 11. Advantages of SAA  Improving economic status of people  Helping banks by focus on small areas  Making lending activity easily amenable to supervision and control  Development of each area through micro level planning  Ensuring co-ordination among financial banks and other development agencies  Encouraging people participation and involvement in credit planning and dispensation
  12. 12. Development of selected villages in an integrated manner
  13. 13. Main Activities  Meeting credit need of poor  Watershed development/livelihood based activities  In tribal dominant villages, development through “wadi” approach  Assessment of credit needs/formulation of projects for agriculture/rural development  Creation of infrastructure in co-ordination with the government
  14. 14.  Marketing related intervention  Environmental/ecological related interventions  Value chain management  Implementation of development programme as envisaged under government plan
  15. 15. Introduced in March 1972 Provide concessional rate of interest to low income group for productive purposes
  16. 16. Features of DRI Scheme  Lending at lower rate.  Main objective is upliftment of backward strata in the society.  Banks monitor the utilization of loans.  Short term ,medium term and long term loans are provided under this scheme.
  17. 17. Introduced in 1967-68 To provide adequate and timely financial support at reasonable rate to priority sectors
  18. 18.  Agriculture  Small Scale Industries  Small Road and Water operators  Irrigation…… ………
  19. 19. RBI stipulates banks to provide credit under Priority sector as follows Banks Domestic Banks Foreign Banks 40% 32% Weaker Sections – 10% Agriculture – 18%
  20. 20. Government give much importance to Priority Sector Lending
  21. 21. Micro credit is the provision of thrift, credit and other financial services and products of very small amount to the poor.
  22. 22. Introduced by Nobel Laureate and founder of Grameen Bank Muhammad Yunus “The poor are like “bonsai", which could have grown into taller trees if given proper soil. Micro Credit can unleash the hidden energy of the poor so that they can take care of themselves”
  23. 23. In India Micro Finance is linked to Self Help Groups(SHG)  A SHG is a registered or unregistered group of micro entrepreneurs having homogeneous social and economic backgrounds. They save money, to contribute to a common fund and to meet their emergency needs on the basis of mutual help.
  24. 24. Functioning of SHG-bank linkage program 1. 2. 3. 4. 5. 6. NGOs and banks interact with the poor, especially women, to form small homogenous groups. They are taught simple accounting methods to maintain their accounts. They meet frequently and collect small amount of savings from their members. This pooled savings enable them to open a formal bank account in the name of the group. This is the first step in establishing link with the formal banking system Out of the pooled savings they give small loans to members for meeting their small emergent needs.
  25. 25. 7. Empowerment is achieved through group dynamics, decision-making, and funds management. 8. When the pooled thrift grows they can receive external funds in multiples of their group savings. 9. Bank loans enable the group members to undertake income generating activities.
  26. 26. Thank You
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