Financial Inclusion for inclusive Growth: Taking FI to Last Mile - S S Bhat, Chief General Manager, Canara Bank

1. Financial Inclusion for inclusive Growth
Taking FI to Last Mile
Presented by :
S S Bhat
Chief General Manager
Canara Bank, Head Office
Bengaluru 1

2. Inclusive Growth
 Sharing benefits from
growth process
 It is both process &
outcome
MEANING MAJOR DRIVERS
 Demographic Dividend
 Greater Domestic &
International Competition
 Increase in total factor
productivity
 Inequalities in distribution of
income &wealth
 Rapidly growing urban region v/s
stagnant Rural region
 29% are still under poverty line
CHALLENGES
 Financial Inclusion initiatives
 Financial Literacy
 Social Security Schemes
 Projects creating job
opportunities
SOLUTIONS
REQUIREMENTS
RESOLVE
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3. Evolution of Financial Inclusion
Rural Branch
Expansion /
Service Area
Bank
Nationalisation
Financial
Inclusion Plan/
PMJDY
Financial Inclusion
Evolution Introduction of
Lead Bank
Scheme
Priority Credit/ Govt
Schemes/ SHGs/ Creation
of NABARD
Establishment
of RRBs
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4. Inclusion is meant to provide….
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5. Financial Inclusion Plan of RBI
From year 2011-13
Aimed at covering villages
with more than 2000
population
Brick & mortar branches to
be opened in 15% of allotted
rest by engaging Banking
Correspondent Agents
Opening of no-frills accounts
Extending other banking
products
From year 2013-16
To extend Banking facilities
to all villages with less than
2000 population
Mandated to open brick &
mortar branches in 5% of
allotted villages and rest by
deploying Banking
Correspondent Agents
Opening no-frills accounts in
these villages and offering
other banking products
Phase IIPhase I
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6. UID
Power of
identity
Enhanced
access to
services
Direct
Benefit
Transfers
Preventing
Leakage
Eases
mobility
Aadhaar – The Game Changer
97 Crore Enrolled
15 Crore seeded
to Bank Accounts
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7. Inclusion in new format
Phase I
Universal
Access to
Banking
Basic Bank
A/c with
Rupay Card
Financial
Literacy
Phase II
Micro Credit
Micro
Insurance
Micro
Pension
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8. Jan Dhan – pushing ahead Inclusion
BACKGROUND
Launched during Aug 2014 to provide
Banking services at all 6 Lac villages
and 1.5 Lac Urban Wards.
Aimed at providing at least one
Savings account to each
household. Provision to open
zero balance a/cs. Financial
Literacy at a/c opening camps.
Accounts were bundled with
benefits like free Rupay Card, Free
Insurance and Loan upto Rs.5000
based on satisfactory conduct of the
account for six months.
All accounts are extended with
mobile banking
STATISTICS
20.72 Crore Savings Bank a/cs have
been opened so far.
Banks have mobilized over Rs.32,000
Crore
13.86 Crore Rupay Cards have been
issued
Zero Balance a/cs have come down to
31%
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9. PMJJBY & PMSBY The JAM TrinitySocial Pension
 Offering accidental and life
insurance at a nominal premium of
Rs.12 and Rs. 330 per year.
 Easy entry, no medical check up.
 Persons upto the age of 50 are
eligible for Life insurance &
Accidental insurance is extended to
people upto the age of 70
 2.94 Crore lives covered under Life
insurance
 9.34 Crore covered under
Accidental insurance
 Three modes of identification to
deliver direct benefits to the poor
 Mobile penetration in the country
is 100 Crore and increasing
 Rs.3.78 Lac Crore or 4.2% of GDP
is currently spent on key subsidies
 Efficient distribution of
Government benefits &
Elimination of privileged who can
afford good standard of living
even without government
subsidies
 Containing the leakage & using
such saved funds for other
developmental activities
 Pension for the unorganised
sector
 Provides for assured pension
of Rs.1000 to Rs.5000
 Persons upto the age of 40 are
eligible
 Government co-contribution
up to Rs.1000 per year
 Facility to nominate
 Over 20 lac accounts opened
so far.
Financial Inclusion for Inclusive Growth
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10. Shishu - Upto Rs.50,000
Kishor - Upto Rs. 5 Lac
Tarun - Upto Rs.10 Lac
MUDRA Facilitating Inclusive Growth
Rs.84,654 Crore
Already
Disbursed
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11. DIGITAL
INDIA
 To make available Government services to all citizens electronically
 Broadband in 2 lac villages & universal mobile phone connectivity
 4 lac public internet access points
 Wi-Fi in 2.5 lac Schools
 ICT initiatives for Financial Inclusion
 To encourage multinational &domestic companies to manufacture in India
 To emerge as top global destination for foreign direct investment
 Job creation & skill enhancement in 25 sectors
 From Sep 14 to Nov 15, projects worth Rs.1.20 lac Crore received
SCHEMES FOR INCLUSIVE GROWTH
MAKE IN
INDIA
Financial Inclusion for Inclusive Growth
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12. STARTUP
INDIA
 Promoting Bank finance for Indian Startup Companies
 To get rid of Licence Raj & hindrances like land, environmental clearance
 Single window clearance with mobile application, Attracted investment of over $10 billion.
 Standup India initiative for loans upto Rs.1 Crore for green field enterprises set up by
SC/ST and Women borrowers
 To create a hallmark called ‘Rural India Skill’, to standardise training
 Course methodology would be innovative, which would include games,
group discussions, brainstorming sessions, practices, case studies etc
 Aims at capacity building of 50 Crore youth by 2022
 To emerge as the Skill Capital of the world
SCHEMES FOR INCLUSIVE GROWTH
SKILLING
INDIA
Financial Inclusion for Inclusive Growth
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13. • Introduced Anchor NGO concept during 2012.
• MOU with renowned NGO M/s Shri Kshetra
Dharmasthala Rural Development Project
(SKDRDP).
• Implementation at Chitrdurga
a backward district, with an
aim to form & link 7000 SHGs
of economically backward
Women.
• NGO gets 5% service charge on
average monthly outstanding
& one time grant assistance of
Rs.1000 per group.
Canara Anchor NGO Model for inclusive growth
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14. 14639 WSHGs formed
with 1.51 lac members
Increase in Income level of
the members from Rs. 125
to Rs.450 per day
14101 WSHGs linked
with credit amounting
to Rs.487 Crore
Resulted in forming 90
Milk producers Co-op
Society in the District
Members opened 10464
Fixed Deposit A/cs
amounting to Rs. 13 Cr &
RD a/cs with Rs. 45 Lacs
No overdue, No Default
100% Recovery
The Success Story….
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15. Last Mile Delivery – Real Challenge
 Huge Population
• 1.27 bn Population
• Urban 31% Rural 69%
• 600,000+ Villages
• Problem of newwork
connectivity & dark areas
 Insufficient Bank Branches
 1 Bank Branch per 8000 people
 1.55 Lakh Post Offices
 Predominantly Cash Economy
 Large population preferring
Cash transactions over e-tran
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16. Last Mile – Critical Factors
Available
Accessible
Affordable
Acceptable
Customer-centric Products /
Services
Anytime, Neighbourhood
Convenience
Should not pinch
the Common Man
Non-tech savvy,
Cash payment option
etc
16

17. Last Mile - Limitations
E-Commerce
 Narrow home PC base
 Internet Users are around 18%
 People without Debit Cards and
Un-willing are huge in numbers
M-Commerce
 Increasing Mobile Subscriber base
• 78% penetration
 NPCI – IMPS gaining momentum
 131 member Banks
 Over 2 Crore Transactions per month
 Still huge scope
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18. Last Mile – the Successful model
1.25 Lac
Bank Mitras
Serving at
Door Step
USSD, the
Other Alternative
On normal
handsets
These Micro
ATMs are
AEPS & Rupay
Enabled
2.42 Crore
IMPS transactions
Happen
Every month
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19. Inclusive Growth should result in….
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20. WAY FORWARD….
Seamless connectivity to all areas thru Broadband connection
Implementation of Interoperability by all Banks
A/c Portability
Debit Card to every account holder
Technological Integration among Banks
Seeding of Aadhaar in all accounts
Making the Bank Mitra, a viable model
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