This document summarizes the microfinance activities of two major public sector banks in India - Indian Bank and Bank of India. It discusses how they provide banking services to rural populations through self-help groups (SHGs) and microfinance institutions. Both banks have opened millions of "no-frills" accounts to boost financial inclusion. They have also simplified KYC procedures and used technologies like smart cards and business correspondents to overcome issues of access in remote areas.
With the help of this presentation you will be able to know the financial inclusion status in india. Stats from RBI and Inclusix index also had been included in presentation.
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.
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.
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.
With the help of this presentation you will be able to know the financial inclusion status in india. Stats from RBI and Inclusix index also had been included in presentation.
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.
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.
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 main purpose of the research paper is to demonstrate the effects of Microfinance as a part of Financial Inclusion in India.
Microfinance: One of the Key drivers of Financial Inclusion
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.
The main purpose of the research paper is to demonstrate the effects of Microfinance as a part of Financial Inclusion in India.
Microfinance: One of the Key drivers of Financial Inclusion
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.
Presentation includes Introduction to Microfinance Industry, Business Process, Strategies, Key Challenges, Future Outlook and Special Issues like Urban Microfinance & Rating of Microfinance Institutions
Analysis of Rural Indebtedness in IndiaAdrijaDutta2
Despite the several farm waiver schemes announced by the Central and State Governments over the
years, rural indebtedness in India continues to increase. Here are the reasons for it.
(Images used in presentation do not belong to the author, they are relevant available pictures from varied owners across digital media.)
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
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If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
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USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
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Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
1. COVER STORY MICROFINANCE SHG RURAL CREDIT KYC NO-FRILLS
Rural
Financial Inclusion
Financial inclusion today is a buzz word for this relatively higher risk segment of the population.
One interesting aspect that has been brought out by studies on
policy makers. How has banks fared in this micro–lending in India is that microfinance is not the sole area
realm? Executive editor N. Mohan features of operations of development institutions. While development
two public sector banks, which have taken up is the ultimate aim, banks are in the field and with an eye on
several programs to offer banking facilities to profit. This has been mainly because of RBI’s policy stipulations
the unbanked population: – that banks are required to lend 40% to priority areas, which
in banking lingo is priority sector lending and which includes
agriculture, SMEs and government securities and microfinance is
ccess to banking for the unbanked populace - largely not that risky as perceived as lending is often made to groups or
rural and to some extent semi-urban - has been a through referrals and the experience has been that repayments are
dominating issue for policy planners and the Reserve Bank of forthcoming in as much as 95% of the cases. While investments
India. The central bank, in line with the importance given to in government securities earn interest rates of 6 to 7%, lending to
financial inclusion, especially in the context of enhancing SHGs or MFIs can fetch interest in the range of 9% to 14%.
agricultural output, has brought in several policy changes, the Banking Frontiers sought details of microfinance endeavors of
major among them being the directive to banks to open as two leading public sector banks – Chennai-based Indian Bank
many no-frills accounts as possible, simplication of the KYC and Mumbai-based Bank of India – which have major exposures
procedures for the BPL (below poverty line) segment, providing in the segment.
the full range of banking services through business facilitators or Rural development and agriculture have been the niche areas
business correspondents in inaccessible rural areas and setting for Indian Bank, declares M.S. Sundara Rajan, chairman and
up of CIBIL to make available credit histories of individuals and managing director of the bank. “Our total branch network of 1,584
small businesses with a view to lower the risk for banks. These includes 470 rural, 394 semi-urban, 393 urban and 327 metro
measures actually increased the access to formal banking services branches across India. Of these, rural and semi-urban branches,
through the use of intermediaries like self-help groups (SHGs) which mostly serve the rural masses, constitute 55% of the total
and microfinance institutions (MFIs). Today, apart from NABARD number of branches. We have the lead bank responsibility in 14
and public sector banks, several private sector and foreign banks districts of south India. We have also sponsored three regional
have accessed the microfinance market either directly or through rural banks (RRBs), having a network of 205 branches to serve
SHGs or MFIs providing a spectrum of financial services ranging the rural masses in Andhra Pradesh, Tamil Nadu and the union
from small value loans to several complex financial services to territory of Puducherry,” says Sundara Rajan.
12 BANKING FRONTIERS FEBRUARY 2009
Cover Story.indd 1 2/12/2009 6:49:57 PM
2. COVER STORY MICROFINANCE SHG RURAL CREDIT KYC NO-FRILLS
He informs that the bank’s an insurance scheme for the
strategic plan for agriculture beneficiaries, the premium of
lending focuses on direct which is Rs 200 per year. Of this
lending to individual farmers, premium, Rs 100 is borne by
SHGs and joint liability groups. the bank and Rs 100 by way of
Agriculture credit portfolio of subsidy from the government.
the bank has enlarged to Rs In the event of death of the
7,326 crore as of December 2008. insured person, the dependent
The bank’s approach has been to will receive Rs 30,000 and
finance small farmers, marginal in the case of accident, Rs
farmers, tenant farmers, 75,000. In addition to these
oral lessees, share croppers, benefits, the bank is offering
agricultural laborers. The bank, free education for two children
he says, offers timely and of a person, the cost of which
adequate credit for short term has been pegged at Rs 2,400
A.P. Ghugal Sundara Rajan
crop production purposes and per year.”
extends loans at concessional The bank also extends credit
rate of 7% interest under the interest subvention scheme of to micfo-finance institutions (MFIs). As of December 2008, it
the government. The bank also extends financial assistance for has funded some 21 MFIs, which includes the leading MFIs of
agri investment activities such as medium/long term loans for India like SKS Microfinance and Bandhan, accounting for a credit
plantation and horticulture, land development, minor irrigation of Rs 192 crore. “We make a major distinction between SHGs
and agri allied activities, loans for farm mechanization activities, and MFIs,” says Ghugal, adding “as in our experience, most of
two-wheeler loans, home loans and loans for land purchase, a the funding advanced to SHGs is productive credit whereas in
debt swap scheme called ‘Ryots Punarudharan Yojana’ to relieve the case of MFIs, the funds can be either productive credit or
the farmers from the clutches of local money lenders. consumption credit. MFIs again charge higher rates of interest
DEVELOPING THE SHG MOVEMENT
Outlining the bank’s efforts in micro-lending, Sundara Rajan
says the bank has been pioneer in developing SHG movement in
the country by forming and credit linking SHGs in Dharmapuri
district of Tamil Nadu way back in 1989. “Our micro finance
portfolio has developed over years. More than 1.44 lakh women
SHGs have been benefited, having a loan outstanding of Rs.
1,230.02 crore,” he added.
Bank of India too, which has a substantially high microfinance
rural banking portfolio, extends credit to SHGs. While there
is no upward limit in funding SHGs, the bank extends funds
above Rs 50,000 only to SHGs. “In funding others,” says A.P.
Ghugal, general manager, priority sector department of the
bank, “we apply the BPL criteria prescribed by the government.
While individuals are technically eligible for financial assistance
under micro-finance schemes, we would prefer to channel credit
through SHGs in order to have a better impact.”
The funding is available to mainly all productive activities,
including farming and other priority sector and cottage industry.
Ghugal says the bank’s interest rate for priority sector lending
is the lowest among all the banks active in this sector - 9% per
annum. “Even NABARD sanctions credit at the rate of 10.25%,”
he says.
As part of corporate policy, the bank is actively involved in
financing SHGs working in tribal and backward areas. “As of now,
we have funded some 1,79,000 SHGs in the country, accounting
for credit worth Rs 464 crore,” said Ghugal. “Of these, as many
as 1,12,000 are women SHGs, with loans worth of Rs 394 crore.
An information Kiosk
As part of the micro-credit program, we have also introduced
BANKING FRONTIERS FEBRUARY 2009 13
Cover Story.indd 2 2/12/2009 6:50:00 PM
3. COVER STORY MICROFINANCE SHG RURAL CREDIT KYC NO-FRILLS
- sometimes as much as 13.5%
- as these organizations have a
commercial interest and they Low-cost ATM
work on a for-profit basis.”
Vortex Engineering is a pioneer the total cost of ownership
in the country in developing a of an ATM, especially in
NO-FRILLS ACCOUNTS
low-cost all-purpose ATM, for rural areas. The problem
What has been the two
rural areas. Vijay Babu, CEO was that not only were ATMs
banks’ role in opening no-frills
of the Chennai-based firm, in expensive but also consuming
accounts?
discussion with N. Mohan: a lot of power which was a
Ghugal says in the last two
problem especially in rural
years Bank of India has opened
What are the major products areas. They also require an AC
some 16 lakh no-frills accounts,
and services are offered by to operate. Existing ATMs can
of which 7.5 lakh such accounts
Vortex Engineering? only dispense fresh, crisp notes.
were opened in the last nine
Vortex has developed a So, we, along with IIT-Madras,
months. “As a lead bank, we
completely indigenous low- set out to develop an ATM for
have responsibility for 48
cost ATM - Vortex Gramateller rural India with none of the
districts in the country. Of these,
- in collaboration with IIT-Madras. It has been above constraints.
we have achieved total financial
done keeping in mind the unique requirements
inclusion in two districts - Raigad
of the rural and semi-urban markets in India. Research reports suggest that mobiles are
in Maharashtra and Keonjhar in
It has many features that are not found in the most desired medium for accomplishing
Orissa. In these two districts,
other ATMs - like low power consumption of financial inclusion. How do you see the role of
all the residents have a bank
less than 50W, no need for air-conditioning, mobile telephony in micro-finance efforts?
account. We are nearing 100%
built-in battery backup for up to four hours of Mobiles will further enable low-cost banking
financial inclusion in two other
operation even under power failure, capability access to customers. With rapid growth of
districts and our roadmap is to
to run on solar power, ability to accept even mobile users, even among the BOP customers,
have 100% financial inclusion
soiled notes for dispensing and solutions using mobiles will enable
in all the 48 districts where we
finger print authentication as a easier banking access to them.
are lead bank.”
standard feature. I consider the Mobiles can offer various services
Sundara Rajan says Indian
low-cost POS devices, mobile phone like balance enquiry, bill payment
Bank has been instrumental in
banking and the low-cost ATMs as and cash less transactions but will
the introduction of financial
the most important technology still require an ATM for reliable cash
inclusion concept in the
innovations to offer affordable and dispensing. Cash withdrawal, either
country. “Way back in 2005,
reliable banking services to the from ones savings account or as loan
we launched National Pilot
BOP customers. or credit, is the most important
Project on Financial Inclusion
banking transaction required. We
Project (NPPFI) in the union
How could you bring in cost saving? have demonstrated a card-less cash
territory of Puducherry. It is
The idea for the product withdrawal using mobile phone and
now implemented by various
originated from IIT-Madras, when our ATM in partnership with mChek.
banks all over the country. With
the noted technology expert, In this model, the bank need not issue
the cooperation of all bankers,
Dr Ashok Jhunjhunwala, was ATM cards to customers and instead
100% financial inclusion has
approached by various leading let them use their mobile phones to
been achieved in the union
banks in India to find a way to reduce withdraw money from ATM.
territory. Subsequently, we
repeated this in Cuddalore
district of Tamil Nadu and
Kollam district of Kerala. We have completed 100% coverage in MANAGING KYC
12 of our lead districts,” says Sundara Rajan. How do the banks overcome the complex KYC issue?
The bank has opened nearly 15 lakh no frills accounts so far, Sundara Rajan says KYC norms have been relaxed by the Reserve
of which 4 lakh accounts were opened in the last financial year Bank of India for low income group members. The customer
alone. For these account holders, ATM cards are issued at the identification and proof of their location are the key components
discretion of the branch managers. No-frills account holders are of the simplified KYC norms. “For establishing a person’s identity
also entitled to SB-overdraft of up to Rs 50,000 for consumption and proof of his location, we can accept ration card, voter’s ID
needs and general credit cards of up to Rs 25,000 to self-employed card, driving license, PAN card and other specified documents. In
persons. More than 50,000 persons have been benefited under Dharavi slums in Mumbai, which is concentrated with migrant
these schemes. population, which has no documentary evidences, certification
14 BANKING FRONTIERS FEBRUARY 2009
Cover Story.indd 3 2/12/2009 6:50:01 PM
4. COVER STORY MICROFINANCE SHG RURAL CREDIT KYC NO-FRILLS
Members of an SHG participating in a discussion sense. First is cost of transportation for an
account holder to come to the branch and
carry out transactions. Second is loss of a
day’s wages in case he or she has to travel to
the bank branch. Third is possible incidental
but avoidable expenses. In our efforts to make
our financial inclusion program a success, we
decided to eliminate these and make banking
available at the doorsteps of the customers in
the far-fetched rural areas. We are leveraging
technology for this purpose.”
The bank adopted a smartcard-based
system developed by Integra Microsystems
for the purpose. These smartcards are
biometrics-enabled, have 16–digit numbers
and are capable of 10 functions. The bank
has already issued nearly 41,000 smartcards
in Raigad district alone, where it has
accomplished 100% financial inclusion.
The bank’s business correspondents go to
from local administration is accepted.” the villages with handheld devices and carry out transactions.
Ghugal says KYC is a major process in opening no-frills accounts, Through this, an account holder can withdraw cash, deposit cash
especially in rural areas of the country. “We largely rely on business or cheque, receive pension or other remittances under the various
facilitators or business correspondents for this. But, we ensure that government schemes, buy insurance or mutual fund – in short
proper KYC is carried out as per norms prescribed by the RBI and practically all the banking transactions that hitherto required
we take full responsibility in verifying the credentials and proof of his or her visiting a bank branch. What is more, he or she gets
residence of the customers,” says he. a confirmation through an SMS about the transaction he had
Do the two bankers think the concept of no-frills accounts completed, gets latest statement, etc. The device is also voice-
performed as per expectations In terms of attracting customers enabled as the account holder can opt to get a voice message
and them doing the transaction? immediately after completion of a transaction.
Sundara Rajan says it has, at least partly. He admits: “However, Indian Bank too has adopted information technology in a
the number of accounts in which the transactions taking place big way in its financial inclusion programs. Sundara Rajan says
is low. People need to be educated and encouraged to operate the bank is planning several information and communication
their accounts and save whatever little is possible. Similarly, SB- technology initiatives as alternative delivery channels for
overdraft and general credit card facilities need to be extended to inclusive banking and for increasing outreach under financial
more number of no-frills account holders. To increase the outreach inclusion and microfinance. There are 20 banking service centers
with our financial products and services, various alternative functioning across India to extend financial / non-financial
delivery channels are deployed by leveraging technology like services under financial inclusion, utilizing the internet facility,
banking service centers, business facilitators, smart card banking, 12 rural internet kiosks serving sugarcane farmers for their credit
biometric ATMs, etc.” and non-credit requirements and biometric smartcard banking
(offline) in Cuddalore (Tamil Nadu), Dharavi (Mumbai) and
IT AS ENABLER Kaligram (Kolkata).
Bankers in general believe financial inclusion can be achieved
by leveraging IT. The government is responsive as the 2007-2008 BRANCH BANKING
budget had provided for the setting up of two funds for financial Indian Bank has also been into urban financial inclusion in
inclusion – the Financial Inclusion Fund for Developmental a big way. Sundara Rajan says the bank’s exclusive Microsate
and Promotional Interventions and the Financial Inclusion branch in Chetput, Chennai, which was opened in 2005, has
Technology Fund to meet cost of technology adoption of about been able to cover poor families in 1,400-odd slums in the city,
$125 million each. touching the lives of more than one lakh poor households. “The
Ghugal narrated constraints that the bank confronted while phenomenal outreach through the branch paved the way for
extending banking facilities in rural and semi-urban areas: the bank to establish 13 more Microsate branches during 2007-
“During our efforts to provide banking facilities in rural and 08 in major cities in India. So far, Rs 136.14 crores has been
semi-urban areas, we have come to realize that there are three disbursed to more than 13,459 women SHGs / JLGs through
major impediments that inhibit financial inclusion in the true these branches,” added Sundara Rajan.
BANKING FRONTIERS FEBRUARY 2009 15
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5. COVER STORY MICROFINANCE SHG RURAL CREDIT KYC NO-FRILLS
The bank is planning to establish 13 more
Microsate branches in tier II cities / towns
in South India. SBI for a Cardless System
Sundara Rajan cites the instance of
Dharavi, the so-called largest slum in Asia. State Bank of India has been very swiped at the POS machine before
“There was no banking facility in these innovative in the use of technology any transaction. All the accounts
sprawling slums till February 2007. This for financial inclusion. The bank the bank opened across the
slum is inhabited by thousands of migrant has now decided country following
labourers from southern districts of Tamil to do away with the decision to
Nadu who did not have bank accounts as smart cards and introduce the
many of them could not produce proof instead rely on cardless system did
of identity to banks. They were finding POS machines, not involve issue
it difficult to send remittances from their which will have of smart cards.
savings to their families residing in Tamil biometric details This has brought in
Nadu. We came to their rescue by opening of account tremendous cost
a branch with CBS facility and online ATM holders stored in savings for the
in Dharavi in February 2007 to facilitate them, and which bank. According
urban financial inclusion. So far, 14,726 will travel to to the bank, only
persons have opened bank accounts at our villages where a miniscule of its
Dharavi branch.” the customers no-frills account
As a complementary link, Indian Bank can carry out holders left their
has also opened a branch at Valliyur in transactions, villages at any
Tirunelveli district of Tamil Nadu, from including receipt given point of
where a large chunk of migrant labourers of payment of cash under social time. Most of the account holders
has moved to Dharavi, to render necessary security schemes of the government accessed the bank to receive the
financial services especially remittance by just recording their fingerprint. pension or the NREGS payment and
facilities. In view of the good response, The bank feels this will drastically as such they do not require inter-
one more offsite ATM centre has also been reduce cost of transactions and operability. In such a scenario, a
opened in Dharavi. it is implementing the project business correspondent of the bank
Dharavi also has some 114 across the country. The prevailing could go with the POS machine at
SHGs formed in association system involved smart cards with periodic intervals to help them
with reputed NGOs. Microfinance to the a magnetic strip that need to be draw the money.
tune of Rs 10 lakhs has been granted during
the current year. The SHGs, majority of
them formed by women have taken up the
business activities such as garment making, leather products, to distress sales.
eatables, etc. In addition to Dharavi, the bank has implemented Adds he: “In addition, we also offer credit for such novel
financial inclusion projects in Chennai and in Guntur district causes as improving health and sanitation in rural areas. Under
of Andhra Pradesh. The bank has won the Skoch Challenger our Nirmal Gram Yojana scheme, rural inhabitants are offered
award for its outstanding initiatives under financial inclusion loans for the construction of toilets. We undertake educational
in Dharavi and Puducherry. programs in the villages highlighting how clean environment and
Ghugal says Bank of India has not been into urban financial sanitation helps cut down suffering and expenses on account of
inclusion. “We are not into this area as our focus is on rural and diseases. Some 35,000 toilet units have already been constructed
semi-urban areas. Personally, I feel that urban financial inclusion under the scheme. Each family gets a loan of Rs 6,000, which
has not taken off in the manner it is publicised about by can be repaid in easy installments over five years.”
some banks.” Indian Bank’s agriculture credit portfolio has grown to
Rs 7,326 crore as of December 2008. It is one of the few banks in
RURAL FINANCE the country, which has consistently overreached the 40% and
about agri-finance, Ghugal says Bank of India offers agri- 18% norm prescribed by RBI for priority sector and agriculture
finance for various agriculture-related activities - farming, farm sector respectively. As of December 2008, the percentage
products, purchase of cattle, purchase of tractors, horticulture, of priority sector and agriculture credit stood at 46.33% and
poultry, plantation, dairying, etc. The finance is available for 19.18% respectively.
traditional farming as well as high-tech. Some of the finance
schemes have been helpful to farmers as they need not resort mohan@bankingfrontiers.com
16 BANKING FRONTIERS FEBRUARY 2009
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