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Financial inclusion
- 1. Credit Inclusions-credit widening and credit deepening AJITT G Department of Agricultural Extension Kerala Agricultural University ©@jit 1
- 2. Financial inclusion Fi is the delivery of services at affordable cost to the vast section of the disadvantaged and low income group Banking, Easy credit, Investment opportunity, Insurance Importance Creating a platform to inculcating the habit of save money Providing formal credit ©@jit 2
- 3. Definitions FI may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at affordable cost (The committee on Financial Inclusion, Chairman: Dr.C.Rangarajan) or FI broadly defined, refers to universal access to a wide range of financial services at a reasonable cost.These include not only banking products but also other financial services such as insurance and equity products (The committee on Financial sector reforms, Chairmam: Dr. Raguram G Rajan). ©@jit 3
- 4. Schemes launched for financial inclusion SWABHIMAN - 2010 Extent banking services to all unbanked areas with a population 2000 or more PMJDY(Pradhan Manthri Jan Dhan Yojana)-2014 “Mera kata bhagya vidhatha” Zero balance account-Rupay debit card 1 lakh accidental recovery- usage once in 90 days ©@jit 4
- 5. Steps taken by RBI to support financial inclusion 1.BSBDA(Basic saving bank deposit account) No fill account No limit on the number of deposits-restriction of withdrawal to 4 2.Appointing business correspondents and business facilitators BC- Merchant bankers- provides banking services BF- create awareness about banking services 3.Opening branches in un banked rural areas 4.Relaxation in KYC guideline ©@jit 5
- 6. Financial deepening FD :offering a wider range of financial goods and services with different maturities, risk and returns from a variety of financial intermediaries ie, Increasing provision of financial services Indicators of FD: 1.Financial institutions and their services across levels of society 2.Growth per capita of real cash in hand ©@jit 6
- 7. Financial widening FW : the accumulation of financial assets at a faster pace than the accumulation of non financial wealth ie, A credit spread is the difference in yield between two bonds that are the same in all aspect expect for the credit. ©@jit 7
Editor's Notes
- Plays its own role in the process of economic development FI protects their financiall wealth FI mitigates exploitation of vulnerable sections by money lenders In India as per 2011 census 58.7% of household avail banking service
- Study by Sadan kumar 2011, on Index of FI based on 3 variables penetration(a/c holders ), availability of banking services(branch per 1000 population) and usage (outstanding credit and deposit) . Result indicates Kerala ,Maharashtra, Karnataka achieved high FI.
- Private initiative- E-chaupal/E-Sagar(ITC),Project shakthi(HUL)
- KYC –Know your Customer Financial inclusion Plan -2010-for 3 year-by public and private bank, also financial literacy centers -2012-out door financial literacy camps at least once a month KCC-Kissan credit card-farmers- meet credit requirement GCC- general credit card- up to 25000 at rural and semi urban banks