The document summarizes Reserve Bank of India's initiatives and policies around financial inclusion and literacy in India. It defines financial inclusion as ensuring access to appropriate financial products and services for vulnerable groups at affordable costs. It discusses the twin pillars of financial inclusion and literacy and outlines strategies and policies to strengthen credit absorption capacities and leverage technology. Key policies highlighted include relaxing KYC norms, increasing rural branch networks, and utilizing the Business Correspondent model. The document also discusses various programs and outreach efforts of RBI to promote financial literacy and collaboration between stakeholders to increase access to financial services and education.
This presentation is based on Financial Inclusion, Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.
This presentation is based on Financial Inclusion, Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.
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 an affordable cost” in a fair and transparent manner by mainstream institutional players”
The Committee on Financial Inclusion
(Chairman: Dr. C. Rangarajan, 2008)
In advanced economies, Financial Inclusion is more about the knowledge of fair and transparent financial products and a focus on financial literacy.
In emerging economies, it is a question of both access to financial products and knowledge about their fairness and transparency.
Financial inclusion is a buzzword now and has attracted the global attention in the recent past. As the approach of 12th five year plan (2012-2017) is faster, sustainable and more inclusive growth, the issue of financial inclusion is emerging as the new paradigm of economic growth. Financial inclusion plays a major role in driving a way the poverty from the country. The main focus of financial inclusion in India is to promote sustainable development and generating employment in rural areas for the rural population. C.Rangarajan Committee (2008) defined financial inclusion as, “The process of access to financial services, and timely and adequate credit needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.” The purpose of financial inclusion is to provide equitable opportunities to every individual to avail the facility of formal financial channels for better life, better living and better income. It can be described as the provision of affordable financial services, viz., access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who are excluded. Though there are few people who are enjoying all kinds of services from savings to net banking, but still in our country around 40% of people lack access to even basic financial services like savings, credit and insurance facilities. Financial inclusion is the road that India needs to travel towards becoming a global player. This paper attempts to study the overview of financial inclusion in India.
Recent initiatives of the government in financial inclusionMohit Jane
Recently there are too many steps taken to initiate the Financial Inclusion in India. Such steps helpful to inculcate every other single person via electronic means.
FULL TITLE:
What is the Cutting Edge for Microfinance in Rural Areas and Arid and Semi-Arid Land?
ROOM: Tsavo A
Translated session: English & French
PANEL:
Chair: Mr. Wolday Amha, Executive Director, Association of Ethiopian Microfinance Institution (AEMFI), Ethiopia
Panelist: Mr. Issa Barro, Inclusive Finance Specialist, United Nations Capital Development Fund (UNCDF), Senegal
Panelist: Mr. Mwangi Githaiga, Managing Director, Kenya Women Finance Trust (KWFT), Kenya
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 an affordable cost” in a fair and transparent manner by mainstream institutional players”
The Committee on Financial Inclusion
(Chairman: Dr. C. Rangarajan, 2008)
In advanced economies, Financial Inclusion is more about the knowledge of fair and transparent financial products and a focus on financial literacy.
In emerging economies, it is a question of both access to financial products and knowledge about their fairness and transparency.
Financial inclusion is a buzzword now and has attracted the global attention in the recent past. As the approach of 12th five year plan (2012-2017) is faster, sustainable and more inclusive growth, the issue of financial inclusion is emerging as the new paradigm of economic growth. Financial inclusion plays a major role in driving a way the poverty from the country. The main focus of financial inclusion in India is to promote sustainable development and generating employment in rural areas for the rural population. C.Rangarajan Committee (2008) defined financial inclusion as, “The process of access to financial services, and timely and adequate credit needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.” The purpose of financial inclusion is to provide equitable opportunities to every individual to avail the facility of formal financial channels for better life, better living and better income. It can be described as the provision of affordable financial services, viz., access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who are excluded. Though there are few people who are enjoying all kinds of services from savings to net banking, but still in our country around 40% of people lack access to even basic financial services like savings, credit and insurance facilities. Financial inclusion is the road that India needs to travel towards becoming a global player. This paper attempts to study the overview of financial inclusion in India.
Recent initiatives of the government in financial inclusionMohit Jane
Recently there are too many steps taken to initiate the Financial Inclusion in India. Such steps helpful to inculcate every other single person via electronic means.
FULL TITLE:
What is the Cutting Edge for Microfinance in Rural Areas and Arid and Semi-Arid Land?
ROOM: Tsavo A
Translated session: English & French
PANEL:
Chair: Mr. Wolday Amha, Executive Director, Association of Ethiopian Microfinance Institution (AEMFI), Ethiopia
Panelist: Mr. Issa Barro, Inclusive Finance Specialist, United Nations Capital Development Fund (UNCDF), Senegal
Panelist: Mr. Mwangi Githaiga, Managing Director, Kenya Women Finance Trust (KWFT), Kenya
Empowering Financial Inclusion through Financial Literacy - Part - 7Resurgent India
Financial Literacy is one of the biggest components of financial inclusion. It comprises of three elements- financial knowledge, financial attitudes and financial behavior. As per a recent Standard & Poor's survey, only 24% of Indian adults are financially literate, the lowest score among the Brics (Brazil, Russia, India, China, and South Africa) nations. The need for financial literacy and its importance for financial inclusion has been acknowledged by all possible stakeholders - policymakers, bankers, practitioners, researchers and academics across the globe. The government and the RBI have been working incessantly towards this end, and while some progress has been made, there is more to be done.
Financial inclusions a pavement towards the future growthTapasya123
India’s economic growth rates higher than most developed countries in recent years, a
majority of the country’s population still residue unbanked. Financial Inclusion is a relatively
new socio-economic concept in India that aspire to change this dynamic by providing
financial services at affordable costs to the underprivileged, who might not otherwise be
aware of or able to afford these services. Global trends have revealed that in order to achieve
inclusive development and growth, the expansion of financial services to all sections of society
is of utmost importance. As a whole, financial inclusion in the rural as well as financially
backward pockets of cities is a win-win opportunity for everybody involving – the
banks/NBFC’s intermediaries, and the left-out urban population. Banks will handle core
infrastructure and services while intermediaries known as Business Correspondents (BC’s)
will be the executors and act as the face of these banking & financial institutions in dealing
with end-users. Therefore, it is assumed that financial inclusion can initiate the next
revolution of growth and prosperity. In the 21st century, India has been pulling all the right
levers to advance financial inclusion and economic citizenship by channelling its own
transactions to lubricate the system. India’s journey towards economic ascension relies on
how the 65% unbanked population of India (conservative 2012 estimate by World Bank) is
enabled with financial infrastructure.
India’s economic growth rates higher than most developed countries in recent years, a
majority of the country’s population still residue unbanked. Financial Inclusion is a relatively
new socio-economic concept in India that aspire to change this dynamic by providing
financial services at affordable costs to the underprivileged, who might not otherwise be
aware of or able to afford these services. Global trends have revealed that in order to achieve
inclusive development and growth, the expansion of financial services to all sections of society
is of utmost importance. As a whole, financial inclusion in the rural as well as financially
backward pockets of cities is a win-win opportunity for everybody involving – the
banks/NBFC’s intermediaries, and the left-out urban population. Banks will handle core
infrastructure and services while intermediaries known as Business Correspondents (BC’s)
will be the executors and act as the face of these banking & financial institutions in dealing
with end-users. Therefore, it is assumed that financial inclusion can initiate the next
revolution of growth and prosperity. In the 21st century, India has been pulling all the right
levers to advance financial inclusion and economic citizenship by channelling its own
transactions to lubricate the system. India’s journey towards economic ascension relies on
how the 65% unbanked population of India (conservative 2012 estimate by World Bank) is
enabled with financial infrastructure.
MEANING AND DEFINITION # ROLE OF NBFC IN INDIA'S GROWTH # ROLE OF NBFC IN URBAN FINANCIAL INCLUSION # ROLE OF NBFC IN REVOLUTIONIZING THE ECONOMY # ROLE OF NBFC IN CAPITAL MARKET # ROLE OF NBFC IN FACTORING # ROLE OF NBFC IN VEHICLE FACTORING
Financial inclusion – objectives - Micro finance as a Development Tool - The Indian Experience - Evolution and Character of micro finance in India - Micro finance Delivery Methodologies and models- Legal and Regulatory Framework- Impact of Micro finance - Revenue Models of Micro finance- Profitability, Efficiency and Productivity Emerging issues
FULL TITLE:
Process of Designing and Implementing a National Strategy for Financial Inclusion: Challenges and Lessons Learned
ROOM: Aberdare Hall
Translated session: English & French
PANEL:
Chair: Mr. Makarimi Adechoubou, Head of the Regional Office for Southern and East Africa, Inclusive Finance Senior Technical Advisor, United Nations Capital Development Fund (UNCDF), South Africa
Panelist: Ms. Angelique Kantengwa, Senior Director Financial Stability, National Bank of Rwanda, Rwanda
Panelist: Mr. Tafsir Amadou Mbaye, National Director Microfinance, Microfinance Direction Ministry, Senegal
Panelist: Dr. Fodé Ndiaye, Head of the Regional Office West and Central Africa, Inclusive Finance Senior Technical Advisor, United Nations Capital Development Fund (UNCDF), Senegal
Financial Inclusion Summit 2016 - Background & Current Status - Part - 1Resurgent India
Financial Inclusion is a key enabler to economic, social and transaction security of a country, thereby driving inclusive growth. It is for this reason that financial inclusion has been one of the key government priorities over the years, through various initiatives like Nationalization of Banks, Expansion of Banks branch network, Lead Bank Scheme, Business Correspondent Model, Mobile banking, Aadhaar enabled banking accounts, e-KYCs etc. Despite these various measures, poverty and exclusion continue to dominate socio-economic and political discourse in India even after six decades of post economic independence era.
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About Potato, The scientific name of the plant is Solanum tuberosum (L).Christina Parmionova
The potato is a starchy root vegetable native to the Americas that is consumed as a staple food in many parts of the world. Potatoes are tubers of the plant Solanum tuberosum, a perennial in the nightshade family Solanaceae. Wild potato species can be found from the southern United States to southern Chile
Synopsis (short abstract) In December 2023, the UN General Assembly proclaimed 30 May as the International Day of Potato.
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Combined Illegal, Unregulated and Unreported (IUU) Vessel List.Christina Parmionova
The best available, up-to-date information on all fishing and related vessels that appear on the illegal, unregulated, and unreported (IUU) fishing vessel lists published by Regional Fisheries Management Organisations (RFMOs) and related organisations. The aim of the site is to improve the effectiveness of the original IUU lists as a tool for a wide variety of stakeholders to better understand and combat illegal fishing and broader fisheries crime.
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Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR)
Commission for the Conservation of Southern Bluefin Tuna (CCSBT)
General Fisheries Commission for the Mediterranean (GFCM)
Inter-American Tropical Tuna Commission (IATTC)
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Indian Ocean Tuna Commission (IOTC)
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1. 1
FINANCIAL INCLUSION &FINANCIAL INCLUSION &
FINANCIAL LITERACYFINANCIAL LITERACY
BI OECD SEMINAR – Roundtable on the updates on
Financial education and Inclusion programmes in India
Dr. DEEPALI PANT JOSHI
CHIEF GENERAL MANAGER-IN-CHARGE
Reserve Bank of India
June 28, 2011
Financial InclusionFinancial Inclusion
As defined by RBIAs defined by RBI
Financial Inclusion is the process of Financial Inclusion is the process of
ensuring access to appropriate financial
products and services needed by
vulnerable groups such as weaker sections
and low income groups at an affordable
cost in a fair and transparent manner bycost in a fair and transparent manner by
mainstream Institutional players.
24-Jun-2011 2
2. 2
Twin Aspects of FinancialTwin Aspects of Financial
InclusionInclusion
Financial Literacy & Financial Inclusiony
Demand Side
Financial Literacy Credit
Counselling
Credit Absorption Capacity
Supply Side
Financial Markets ,
Banks
& Services
24-Jun-2011 3
Credit Absorption Capacity
Knowledge of products
Need for total products
& services
Appropriate Design of
products & services
ObjectiveObjective
To provide complete Financial services encompassing all below: -
A basic no frills banking account for making / receiving payment.g g g y
Saving product (including investment / pension) suited to the pattern of cash
flows of poor households.
Simple credit products, Overdrafts linked with No-frill a/c’s, KCC, GCC, ACC
etc.
Remittance - money transfer facilities.
Micro Insurance (life and non-life) Micro Insurance (life and non life).
Micro Pension
CREDIT COUNSELLING AND FINANCIAL EDUCATION/LITERACY
INTEGRAL TO PROCESS OF BUUILDING BASIC FINANCIAL SKILLS
AND IS A CONTINUOUS PROCESS
24-Jun-2011 4
3. 3
StrategyStrategy
Refine existing credit delivery Refine existing credit delivery
mechanism.
Strengthen credit absorption capacities.
New model for effective outreach.
Leverage ICT & Technology based
solutionssolutions.
24-Jun-2011 5
Financial InclusionFinancial Inclusion-- PolicyPolicy
InitiativesInitiatives
Regulatory dispensation on KYC norms:
Know Your Customer (KYC) requirements for opening bank accounts relaxed
with deposit transaction caps for low volume transactionswith deposit transaction caps for low volume transactions.
Simplified branch authorisation:
Domestic Scheduled commercial banks permitted to freely open branches in
centres with population less than 50,000. subject to reporting
To step up opening of branches in rural areas for increased banking
penetration and consequent financial inclusion, banks mandated by RBI’s
Monetary Policy Statement – April 2011 to allocate 25 % of the total number
of branches in unbanked rural centre's.
Business Correspondent/ Business Facilitator Model
January 2006 - Reserve Bank introduced BC/BF model for carrying out
banking activities on behalf of banks. In 2010 ‘For Profit Companies’ allowed
as BCs of banks.
BC is only a pass through agent of the bank.
24-Jun-2011 6
4. 4
RBI’s direction to BanksRBI’s direction to Banks
All villages with population over 2000 to have
access to financial services through a banking
outlet by March 2012 - Harness Low Cost
technology and innovate Low Cost business
model.
Board Approved Financial Inclusion plan (FIPs)
to be rolled out by banks over the next three
yearsyears.
Include criteria regarding Financial Literacy and
Inclusion in performance evaluation of the
staff.
24-Jun-2011 7
Financial LiteracyFinancial Literacy ––
RBI’S approachRBI’S approach
The Organization for Economic Cooperation and
Development defined Financial Literacy as ability to
it d ff ti l fi i l tgrow, monitor and effectively use financial resources to
enhance wellbeing and economic security of one self,
ones family and ones business.
The economic crisis has brought into sharp focus that
financial literacy is an important element for promoting
financial inclusion and ultimately financial stabilityfinancial inclusion and ultimately financial stability.
Lack of basic financial skills contributes to personal
hardship and broader economic risk
24-Jun-2011 8
5. 5
Role of Financial LiteracyRole of Financial Literacy
Deepening of financial sector is essential for
developed and matured economy
Financial deepening is only possible when
individuals and households are financially
literate to make informed choices about how
they save, borrow and invest
Access to entire gamut of banking services to
nearly half of our left behind population wouldnearly half of our left behind population would
help raise household / overall domestic saving
(36% of GDP in 2007-08 since increased to 39%
) further and fulfill one of the necessary conditions
to the aspired double digit growth.
24-Jun-2011 9
Financial Inclusion throughFinancial Inclusion through
Financial LiteracyFinancial Literacy
Fi i l I l i d Fi i l Lit Financial Inclusion and Financial Literacy
are twin pillars: -
Financial Literacy stimulates the
demand side – making people aware
of what they can demand.
Financial Inclusion acts from supplypp y
side providing the financial
market/services what people
demand
24-Jun-2011 10
6. 6
Financial Literacy for Financial Inclusion
Demand Side Problems
Literacy level very low
Located mostly in rural / remote areas.
Disadvantaged social group
Dependent mainly on informal sources of
credit from moneylenders on exploitativecredit from moneylenders on exploitative
terms
Financial exclusion more severe with high
credit gap in 256 districts identified by
Rangrajan committee.
24-Jun-2011 11
Financial Literacy for Financial Inclusion
Supply Side Challenges
Distance from banks
Appropriate product
Convenient Timing,
Attitude of staff
Proof of identity
Large number
Low value
High transaction cost, etc.
24-Jun-2011 12
7. 7
Financial Literacy for Financial Inclusion
Financial Literacy has three
components: -components: -
1. Personal financial management.
2. Information about various financial
services, products to choose from.
3. Operational knowledge.
24-Jun-2011 13
Elementary Approach
Financial Education included in the school
curriculum in several States
24-Jun-2011 14
8. 8
Consumer Protection - Alerts
Job No. 19832 Fictitious Offer Ad Size: 25X16 English
24-Jun-2011 15
Financial Literacy Initiatives by banksFinancial Literacy Initiatives by banks --
IllustrationsIllustrations
Th 218 Fi i l Lit d C dit There are 218 Financial Literacy and Credit
Counselling Centres set up by banks in 20 States
covering around 1000 people per centre. Over
3,00,000 people covered so far.
Lead banks in all districts advised to intensify
credit counselling activitiescredit counselling activities
24-Jun-2011 16
9. 9
Key to SuccessKey to Success –– CollaborationCollaboration
Governments- Central and State
S RBI, IRDA, SEBI, PFRDA, NHB and
other regulators
Banks, Insurance Companies, MFs ,
other FIs and Intermediaries, Industry
Associations
GO C O NGOs and Consumer Organizations
Global Co-operation
24-Jun-2011 17
For Financial Access and EducationFor Financial Access and Education
Imperatives to succeed ……Imperatives to succeed ……
The key is establishing an appropriate
Business Delivery Model through the
involvement of all stakeholders to make
Financial Inclusion a reality
Access to financial services and
Financial Education mustFinancial Education must
happen simultaneously
It must be continuous and must target
all sections of the population
simultaneously 24-Jun-2011 18
10. 10
Financial LiteracyFinancial Literacy ––
Initiatives by RBIInitiatives by RBI-- excerptsexcerpts
Outreach Programmes:
76 programmes have been conducted across the country focusing
on twin objectives of financial inclusion and financial literacy in which
the Governor/ Deputy Governors / Executive Directors of RBI
participated.
Besides this, more than 150 Outreach programmes have been
conducted as on date by the Regional Offices and Offices of the
Banking Ombudsman as part of the Financial Literacy initiatives.
160 remote unbanked villages selected for transformation into model 160 remote unbanked villages selected for transformation into model
villages characterized by 100% financial inclusion through ICT
initiatives, leveraging on BCs and BFs.
Release of a book titled ' I can do Financial Planning‘ on financial
education.
Organisation of Town Hall events and release of films on financial
literacy
24-Jun-2011 19
Financial Inclusion PlanFinancial Inclusion Plan
AggregatesAggregates
Consolidated FIP
Sl. No. Parameter As at end March
2010
As at end March
2011
1 Total Number of villages covered 54,757 99,840
2 Villages covered through branches 21,499 22,684
3 Villages covered through Business Correspondents (BCs) 33,158 76,801
4 Other modes like Rural ATMs, Mobile Van,s etc. 100 355
5 Number of villages > 2000 population covered 27,743 53,397
6 Number of villages < 2000 population covered 27,014 46,443
7 No. of BCs employed by banks 33,042 58,351
8 N mb r f N Frill A nt (NFA ) p n d (in milli n) 49 55 74 398 Number of No-Frills Accounts (NFAs)opened (in million) 49.55 74.39
9 Amount in NFAs (Rs. in million) 48952 65657
10 Number of NFAs with Overdraft(OD) facility (in million) 0.14 4.2
11 NFAs with OD- Amount outstanding (Rs. million) 91 1987
12 Number of Kisan Credit Cards (KCCs) issued (in million) 19.5 22.49
13 Amount outstanding in KCCs (Rs. million) 10,75,187 14,38,622
14 Number of General Credit Cards (GCCs) issued (in million) 0.67 0.95
15 Amount outstanding in GCCs (Rs. million) 8,398 13,07724-Jun-2011 20
11. 11
Road AheadRoad Ahead
Consolidated FIP
Sl. No. Parameter Mar 12 -
Targets
Mar 13 -
Targets
1 Total Number of villages covered 2,23,473 3,48,283
2 Villages covered through branches 24,618 25,694
3 Villages covered through Business Correspondents (BCs) 1,97,523 3,20,441
4 Other modes like Rural ATMs, Mobile Van,s etc. 1361 2177
5 Number of villages > 2000 population covered 89,657 93,630
6 Number of villages < 2000 population covered 1,33,816 2,54,653
7 No. of BCs employed by banks 1,25,988 1,87,972
8 N b f N F ill A (NFA ) d (i illi ) 109 6 153 38 Number of No-Frills Accounts (NFAs)opened (in million) 109.6 153.3
9 Amount in NFAs (Rs. in million) 93,110 113,233
10 Number of NFAs with Overdraft(OD) facility (in million) 36.3 53.3
11 NFAs with OD- Amount outstanding (Rs. million) 14,458 22,282
12 Number of Kisan Credit Cards (KCCs) issued (in million) 32.3 40.7
13 Amount outstanding in KCCs (Rs. million) 15,21,135 17,92,548
14 Number of General Credit Cards (GCCs) issued (in million) 4.68 8.11
15 Amount outstanding in GCCs (Rs. million) 32,291 56,69724-Jun-2011 21
Thank you.
deepalipantjoshi@rbi.org.in
24-Jun-2011 22