Financial inclusion Jammu and Kashmir Suhail Qasim Mir


Published on

Financial inclusion drive of j&k bank Jammu and Kashmir
By: Suhail Qasim Mir

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Financial inclusion Jammu and Kashmir Suhail Qasim Mir

  1. 1. Financial Inclusion Drive of J&K Bank: A Study on customer satisfaction towards No-Frills Account Undertaken At Under the supervision of: Mr. M H Makhdoomi Director RSETI,Anantnag Presented By: Suhail Qasim Mir 12-MBA-69
  2. 2. Company Profile:  Founded on October 1,1938 and it commenced business from July 4,1939  Was started with a share capital of Rs 6 lac  A billion dollar company  685 Branches and 613 ATMs across the country  Governed by the Companies Act and Banking Regulation Act of India  Regulated by RBI and SEBI.  It finds a listing on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) as well.
  3. 3. Extent of Financial Exclusion-Global  2.5 billion adults, just over half of world’s adult population, do not use formal financial services to save or borrow.  2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East.  Of the 1.2 billion adults who use formal financial services in Africa, Asia, and the Middle East, at least two-thirds, a little more than 800 million live on less than $5 per day. Not an Indian specific problem but a global one
  4. 4. Extent of Financial Exclusion-India  In India, almost half the country is unbanked.  India has the highest number of households (145 million) excluded from Banking.  There is only one bank branch per 14,000 people.  Just 18 per cent have debit cards and less than 2 per cent have credit cards. Exclusion is staggering whichever parameter one chooses to look at !
  5. 5. What is 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. 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.
  6. 6. What has been done so far… (RBI Initiatives….) Opening of No-Frills accounts Relaxation on know-your-customer (KYC) norms Engaging business correspondents (BCs) Financial Literacy and Credit Counseling Centers (FLCCCs) Use of technology Simplified branch authorization Opening of branches in unbanked rural centers
  7. 7. Achievements so far….  Banking connectivity has been extended to 2,11,234 villages up to December 31, 2012 from 67,694 villages in March 2010. 5694 rural branches have been opened.  Numbers of Business Correspondents have increased from 34,532 to 1,52,328.  1714.27 lakh Basic Savings Bank Deposit Accounts, 317.33 lakh Kisan Credit Cards and 31.14 lakh General Credit Cards remain outstanding as on December 31, 2012.  658 Financial Literacy Centers (FLCs) functioning as at the end of December 2012  1.5 million people educated during the period April to December 2012
  8. 8. The State of Jammu and Kashmir lags behind other states in its vital Financial Inclusion Indicators; CreditDeposit Ratio at a meagre 35.71 against the benchmark 60, and Financial Exclusion to the extent of 68% which is highest in the Northern Region.
  9. 9. Research Objectives: To check how effectively the financial inclusion drive is being carried out at the Bank To check the level of awareness with the SB Ujjala No- Frills Account”
  10. 10. J&k Bank Initiatives… Khidmat Centers: Common Service Centers or Khidmat Centers offer the following services:              One can get his documents Photostatted, Digital photograph, Copy of land record, Copy of registration, Date of birth certificate, Death of certificate, Lodge FIR, Ration card, Deposit small sum of money, Withdraw small of money, Loan application form, Saving account opening forms and Most important many information about banks schemes and products. It is very beneficial for the customers.
  11. 11. ‘Swabhimaan Campaign’ for coverage of villages with population > 2000 Under Financial Inclusion Plan (FIP) of J&K State (under ‘Swabhimaan’ campaign of GOI), 795 identified unbanked villages (having population over 2000) were allocated among 5 major banks for providing banking services(ICT) to these villages. The target of providing (ICT)-based banking services in 795 identified unbanked villages (having population over 2,000) was almost accomplished, leaving only nine villages uncovered due to lack of connectivity and other infrastructural deficiencies at these places. Provision of banking services to villages with population below 2000 In the phase-II of Financial Inclusion Plan (FIP) in terms of Reserve Bank of India guidelines ; a total of 5582 villages (having population less than 2000) were identified. Of the total 5582 villages(having population less than 2000), 1093 villages were allotted to J&k Bank, out of which in 981 villages,business Correspondents (BCs) have been rolled out for extending ICT enabled financial services through the operation of smart cards
  12. 12. Branch Expansion Plan of J&K Bank: Pursuant to the GoI, MoF directive all banks operating in J&K State had submitted to GoI, MoF their Branch Expansion Plans for J&K State envisaging a total of 209 new branches to be opened in the State. Name of The Bank No of Branches under BEP J&K Bank 114 Progress achieved upto the end of March 2013 99 Backlog/No. of branches yet to be opened 15
  13. 13. Financial Literacy Centers (FLCs): Financial Literacy Centers (FLCs) will impart financial literacy in the form of simple messages like:  Why Save?  Why save early in your Life?  Why save with banks?  Why borrow from Banks?  Why borrow as far as possible for income generating activities?  Why repay in time?  Why insure yourself?  And why save for your retirement? etc.
  14. 14. Setting up of Rural Self-Employment Training Institutes (RSETIs): RSETIs are Rural Self Employment Training Institutes, an initiative of Ministry of Rural Development (MoRD) to impart training and skill up gradation of rural youth geared towards entrepreneurship development. The responsibility of setting up RSETIs in all the districts of J&K State was assigned by J&K SLBC to J&K Bank in 12 districts and to SBI in 10 districts in accordance with the lead bank responsibilities assigned to them by RBI in the State. As on 31.3.2013 J&K Bank has operationalized RSETIs in all the 12 districts allocated to it by the J&K SLBC, viz. Districts Srinagar, Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Rajouri and Poonch
  15. 15. FIP of J&K Bank, Achievements so far..  1,928 identified unbanked villages have been provided with Business Correspondents (BCs), a) 420 self-set target villages. b) 527 above-2,000 population villages c) 981 below-2,000 population villages  629 Village Level Entrepreneurs (VLEs) of CSCs have been engaged as BCs and are linked to 351 base branches/business units for providing ICT-enabled financial services  9.09 lac accounts have been opened in 1,928 villages, comprising 4.61 lac no-frills/saving bank deposits accounts and 4.48 lac other accounts.
  16. 16. Achievements Continued…  Household coverage has reached 54.60% in 1,928 rolled out villages.  1.53 lac Smart Cards have been delivered to concerned business units  15 model villages selected by RBI for 100% financial inclusion in the state have been allocated to J&K Bank, which are operational and transactions are taking place through the operation of smart cards. 4,819 smart cards have been issued in 15 RBI-selected villages.  357 outdoor financial literacy camps have been conducted in the lead districts and 41,779 persons have attended the camps.
  17. 17. SB Ujjala-No Frills Account Characteristics :  Minimum initial deposit is 50/ The maximum balance in a SB Ujjala account shall be 50,000/-.  The maximum credits allowed in a SB Ujjala account should not exceed 1,00,000/- in a year.  4 withdrawals permissible per month.  Cheque book facility available to account holder/s maintaining average quarterly balance of 1000/- and above for past 6 months  Interest Rate 4%
  18. 18. Research/Survey  Topic Of The Research: Financial inclusion drive of J&K Bank: A study on customer satisfaction towards No-Frills Account  Nature Of Work: Field based  Research Type: Descriptive research  Data Type: Primary Through -Questionnaire Secondary Through- Company's website, Reports of company, Articles, Research Papers  Sampling: Non-random using convenient and judgment sampling  Sample Size: 115
  19. 19. DATA ANALYSIS AND INTERPRETATION Respondents Having Bank Account 25% Yes 75% No Interpretation: Out of the total 115 respondents asked, 88 have account and 27 don’t have any
  20. 20. Distribution of Accounts to various banks 3% 24% 9% j & k bank account holders 64% SBI No account Other Banks Interpretation: Out of 88 respondents having a bank account, 74 have it in J&K Bank, 10 have it in SBI and 4 have it in other banks. This infers that J&K Bank is almost in monopoly in the state
  21. 21. Level of awareness with the financial inclusion plan (FIP) of J & K bank 12% 51% 29% High Medium Low 8% Very low Interpretation: Out of 115 respondents asked, 14 persons have high, 33 have medium, 9 have low and 59 have very low level of awareness with the financial inclusion plan of the j & k bank.
  22. 22. Level Of Awareness About The Concerned Village Being Under The FIP 36% yes 64% Interpretation: Out of 115 respondents asked 41 persons knew that their village was under the financial inclusion plan while as 74 didn’t know about this. no
  23. 23. Do you know that you can open an account with zero balance at J&K Bank? 50% 50% Yes No Interpretation: Out of 115 persons asked 57 said that they knew about the zero balance (No Frills) account while 58 said that they didn’t Knowledge regarding No-Frills account among people is more than the knowledge about FI drive of the bank. This is because J&K Bank had opened many zero balance accounts for students.
  24. 24. Reason for opening No Frills Account To receive scholarship payment 7% 17% 10% For managing day to day(small)expenses 59% 7% Earn interest on saving For small savings To get access to loans Interpretation: Out of 29 persons having No-Frills account,17 opened it to receive scholarship payment,2 for managing day to day expenses,3 for earning interest on savings,5 for small savings and 2 to get access to loans Most of the respondents opened it to get funds from somewhere e.g., wages under NAREGA, old age pension, financial assistance for construction of room under Indira Awaas Yojana
  25. 25. Reason for Liking the No-Frills Account 31% Least formalities 69% Free of cost Interpretation: Out of 29 respondents who like no-frills account, 20 like it because it has least formalities and 9 like it for being free of cost.
  26. 26. Did you face any difficulty in opening the No-Frills Account? 7% No Yes 93% Interpretation: 2 out of total 29 respondents with No-Frills Account faced difficulty in opening No-Frills account, while 27 didn’t
  27. 27. How often do you use your No-Frills Account? Once in a month 23% 32% 2-4 times a month 6% 39% weekly 0% When scholarship amount is credited Only once after opening Interpretation: Out of the 29 respondents having No-Frills Account 12 use it when scholarship amounts are credited,10 have used it just once after opening,7 use it once in a month while 2 use it 2-4 times a month
  28. 28. Did you ever take any loan from your No-Frills Account? 10% Yes No 90% Interpretation: Out of 29 respondents having No-Frills Account, 3 had taken loan while 26 had not
  29. 29. Knowledge Regarding Basic Features of No-Frills Account 40 20 15 14 21 9 0 Max Deposits Max Credit Interpretation: 15 had knowledge about maximum deposits limit 14 knew about max credit limit 21 had knowledge about the interest rate and 9 knew about max withdrawals per month Interest rate Max withdrawls per month
  30. 30. What is your satisfaction level towards No Frills Account? 0% 7% 0% 10% Excellent 35% Very Good Good 48% Fair Bad Very Bad Interpretation: Of the total 29 respondents with No-Frills Account,3 rated their satisfaction level as “Excellent”,14 rated as “Very Good”,10 rated as “Good” and 2 persons rated their satisfaction level as “Fair”
  31. 31. Findings:  J & K bank is almost in monopoly in the state with almost 80% of the market share  Only 36% of population has information about their village being under the financial inclusion  Almost 50% of the population knew that they can open an account with zero balance at J&K Bank  Majority of the population (59%) opened No-Frills Account to receive funds from somewhere  J&K Bank has implemented Saving-Ujjala account very effectively at operational level as 93% respondents did not face any difficulty in opening these accounts.  Frequency of usage of the account is not very high  90% of people never took any loan from No-Frills Account  The level of awareness regarding basic features of No-Frills Account is not upto the mark.
  32. 32. Suggestions and Recommendations:  The Bank should study the causes of financial exclusion and design strategies to ensure inclusion of the poor and disadvantaged  Although, the bank claims to have attained 83% financial inclusion in the study area, the survey conducted during the course of the study revealed that only 50-55% inclusion has been attained.  Disparity in savings and expenditure pattern. The design of no frills SB-Ujjala account should conform well to the saving and expenditure pattern of the people  In a few villages, the focus of the bank was confined to ensuring a bare minimum access to bank accounts without frills. There is no follow up  In case of emergency, people find it convenient to approach non-institutional sources for their credit needs. Need specific loans / credit schemes can attract the people towards the banking sphere.  J & k Bank should also demand from the Govt. interest subsidy as other nationalized banks are availing to compete with other banks.  Policy makers at different levels, - at headquarter level, zonal heads and other staff at zonal office level & even staff at operational level should know that how important the subject is for the progress and growth of bank and the country.  Technology can be a very valuable tool