Financial inclusion Jammu and Kashmir Suhail Qasim Mir
Financial Inclusion Drive of J&K Bank:
A Study on customer satisfaction towards No-Frills Account
Under the supervision of:
Mr. M H Makhdoomi
Suhail Qasim Mir
Founded on October 1,1938 and it commenced business from July
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.
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
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
Exclusion is staggering whichever parameter one chooses to look at !
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
In emerging economies, it is a question of both access to financial
products and knowledge about their fairness and transparency.
What has been done so far…
Opening of No-Frills accounts
Relaxation on know-your-customer (KYC) norms
Engaging business correspondents (BCs)
Financial Literacy and Credit Counseling Centers
Use of technology
Simplified branch authorization
Opening of branches in unbanked rural centers
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
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
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-
J&k Bank Initiatives…
Common Service Centers or Khidmat Centers offer the following services:
One can get his documents Photostatted,
Copy of land record,
Copy of registration,
Date of birth certificate,
Death of certificate,
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.
‘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
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
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
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
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
upto the end of
branches yet to be
Financial Literacy Centers (FLCs):
Financial Literacy Centers (FLCs) will impart financial
literacy in the form of simple messages like:
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.
Setting up of Rural Self-Employment Training Institutes
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
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.
Household coverage has reached 54.60% in 1,928 rolled out
1.53 lac Smart Cards have been delivered to concerned business
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
357 outdoor financial literacy camps have been conducted in the
lead districts and 41,779 persons have attended the camps.
SB Ujjala-No Frills Account
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%
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
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
DATA ANALYSIS AND INTERPRETATION
Respondents Having Bank Account
Out of the total 115 respondents asked, 88 have account and 27 don’t have any
Distribution of Accounts to various banks
j & k bank account
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
Level of awareness with the financial inclusion plan (FIP) of
J & K bank
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 &
Level Of Awareness About The Concerned Village Being Under The FIP
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.
Do you know that you can open an account with zero balance at J&K Bank?
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.
Reason for opening No Frills Account
To receive scholarship
For managing day to
Earn interest on saving
For small savings
To get access to loans
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
Reason for Liking the No-Frills Account
Free of cost
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.
Did you face any difficulty in opening the No-Frills Account?
2 out of total 29 respondents with No-Frills Account faced difficulty in opening
No-Frills account, while 27 didn’t
How often do you use your No-Frills Account?
Once in a month
2-4 times a month
amount is credited
Only once after opening
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
Did you ever take any loan from your No-Frills Account?
Out of 29 respondents having No-Frills Account, 3 had taken loan while 26 had
Knowledge Regarding Basic Features of No-Frills Account
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
What is your satisfaction level towards No Frills Account?
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”
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
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
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
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