Financial Inclusion
Innovations & Initiatives
What is Financial Inclusion
Financial
Inclusion
is
a
comprehensive and holistic process
of ensuring access to financial
se...
Why Financial Inclusion (FI)
 Nearly 60% of the population in Odisha do not
have access to the basic financial services.
...
Benefits of encouraging Financial Inclusion
To the Customer:

To BC

Affordable access to
banking services
practically at...
5 A’s of Financial Inclusion

Availability – Point of presence & Choice of
products
Awareness – Information, Education, ...
Initiatives to facilitate FI
● Liberalised KYC norms
● Allowing engagement of BC/BF by banks for
providing the last mile b...
FIP Initiatives of SBI in
Odisha
● Covered 833 villages with population >2000 by March
2013.
● 2685 villages with populati...
Financial Inclusion: Current
Thrust
Micro
Credit

Activate
inactive
CSPs /
Accounts

Improvement in
Transactions in
BC cha...
Challenges
Technolog
y

Scalability and sustainability (Business Continuity,
Disaster Recovery, etc.)
Technology upgrada...
Challenges Infrastructure

Network connectivity in many villages is very poor or
erratic.
Stable supply of electricity f...
Financial Learning Centres
 Financial Literacy is having basic knowledge of
managing one’s own money and developing thrif...
FI Products through BCs
SB cum OD

Remittances

Recurring
Deposit

F I
products

Tatkal
(non-home
transactions)

Micro
Cre...
Extensive use of ICT by SBI
● Internet based Kiosk Banking platform for realtime transactions.
● Micro ATM or “Cash at POS...
Cash at POS
Debit card and POS machine
Kiosk Banking & POSAccessories
Achievement of SBI in
Odisha

MARCH ’11 MARCH ’12 MARCH ’13 DEC
FI Activity
thru Br &
BC channel
No. of
accounts
(000)
% g...
Thank You
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eOdisha Summit 2014 - Financial Inclusion Innovations & Initiatives - K M Trivedi, CGM, State Bank of India (SBI), Odisha

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eOdisha Summit 2014 - Financial Inclusion Innovations & Initiatives - K M Trivedi, CGM, State Bank of India (SBI), Odisha

  1. 1. Financial Inclusion Innovations & Initiatives
  2. 2. What is Financial Inclusion Financial Inclusion is a comprehensive and holistic process of ensuring access to financial services by all the people in a fair, transparent and equitable manner at affordable cost.
  3. 3. Why Financial Inclusion (FI)  Nearly 60% of the population in Odisha do not have access to the basic financial services.  Need for making banking and payment services available to the entire population at affordable cost and without discrimination.  The financial inclusion helps people to benefit from the overall socio-economic growth and development of the State.  Empowering people to take their financial decisions in the best possible way for themselves.
  4. 4. Benefits of encouraging Financial Inclusion To the Customer: To BC Affordable access to banking services practically at the doorstep Employment opportunity Availability of Govt Benefits direct in bank accounts Loans and Remittance Facility (Migrants) Surplus income Saving/SafetyEmpowerment of women Release from the clutches of local money lenders Improvement in Economic status. Improved financial Opportunity to expand existing business Ride on the Brand name of the Bank Respectable Image in society Customer base for its own activities other than banking activities To Bank: Increase Outreach Increase Customers  Base Improving Market share Potential business Low investment outlets/low transaction cost Low cost CASA deposits To Govt: Reaching out to unbanked population. Inculcating saving /banking habit Reducing migration to urban centres Speeding up economic development Corporate Social Responsibility 4
  5. 5. 5 A’s of Financial Inclusion Availability – Point of presence & Choice of products Awareness – Information, Education, Communication Acceptability – Value desired by the customers Affordability – Value for money Accessibility – Convenience, lower entry thresholds 5
  6. 6. Initiatives to facilitate FI ● Liberalised KYC norms ● Allowing engagement of BC/BF by banks for providing the last mile banking and financial services. ● Liberalised branch opening by relaxing branch licensing policy. ● Introduction of new banking products such as “Nofrills” accounts (Basic Savings Bank Deposit Accounts), Small SB Accounts, loan products like GCC, KCC.
  7. 7. FIP Initiatives of SBI in Odisha ● Covered 833 villages with population >2000 by March 2013. ● 2685 villages with population below 2000 have been covered till end of December 2013. ● 2775 more villages will be covered by March 2014. ● Opened 588 rural and semi-urban branches to reach hinterland of Odisha. ● Have plans to open 27 more branches in unbanked villages by March 2014. ● More than 800 CSPs of SBI are also operating in villages. 1000 more will be opened by March 2015
  8. 8. Financial Inclusion: Current Thrust Micro Credit Activate inactive CSPs / Accounts Improvement in Transactions in BC channel accounts Coverage of unbanked villages Financial Inclusion ATM Cards to DBT beneficiaries/FI / KCCs customers Setting up of Branches/ CSPs/ATMs Account opening & Aadhaar Seeding of DBT/DBTL beneficiaries Spread Financial Literacy/ Awareness 8
  9. 9. Challenges Technolog y Scalability and sustainability (Business Continuity, Disaster Recovery, etc.) Technology upgradation is happening at faster pace but the functionality of BC delivery platform at front-end has to be simple and user friendly. Managing multiple and evolving technologies involves cost BC Channel Viability of BC channel Engaging CSPs in small villages remains unviable. Acceptability of BC model in rural masses. Many BC outlets are inactive. Attrition of CSPs. Around 60% of accounts opened through BC channel are inoperative Viability Issues     Low Business Volume Low transactions value Higher capital expenditure in technology & BC roll out. Overall, Viability remains critical in low potential centres. 9
  10. 10. Challenges Infrastructure Network connectivity in many villages is very poor or erratic. Stable supply of electricity for operations Law and order position in certain parts of the State. 14 backward/Left Wing Extremism (LWE) affected district in SBI’s area of operations. SHGs formation slowing down Micro Finance Institutions (MFIs) regulatory framework SHG Credit linkage Others are slowly adjusting to Slow progress in Aadhaar enrolment and seeding of accounts. DBT Operational Risk Continued   Risks associated with outsourcing Reputation risk (for poor/discontinued service, frauds, misselling) Cash Management   Cost of movement of Cash Risk associated with movement and retention of cash 10
  11. 11. Financial Learning Centres  Financial Literacy is having basic knowledge of managing one’s own money and developing thrift habits.  ‘A rupee saved is a rupee earned.”  A person who is financially literate can spend wisely, use scarce resources more effectively.  We have 19 FLCs in the state to impart the knowledge of the need for and benefits of saving in the formal financial system.  Conducted 281 programmes for 10373 villagers.  Conducted audio-visual shows highlighting the risky nature of chitfund and why formal financial institutions should be preferred for saving.
  12. 12. FI Products through BCs SB cum OD Remittances Recurring Deposit F I products Tatkal (non-home transactions) Micro Credit Micro Insurance Fixed Deposit 12
  13. 13. Extensive use of ICT by SBI ● Internet based Kiosk Banking platform for realtime transactions. ● Micro ATM or “Cash at POS” operating on GPRS. Already 443 of such POS machines are in use by the BCs of the Bank. Also issued so far 55600 RuPay FI debit cards for use in ATMs and POS machines. ● Mobile phone based handheld devices for banking services. ● Personal Accident Insurance cover at reasonable cost.
  14. 14. Cash at POS
  15. 15. Debit card and POS machine
  16. 16. Kiosk Banking & POSAccessories
  17. 17. Achievement of SBI in Odisha MARCH ’11 MARCH ’12 MARCH ’13 DEC FI Activity thru Br & BC channel No. of accounts (000) % growth Balance in lacs % growth ’13 1096 1413 1711 2040 - 28.9 21.1 25.6 4596 3552 5344 - (-)22.7 50.5 (annualised ) 9593 79.5
  18. 18. Thank You

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