PRESENTED BY: Wendell Miranda Sumit Dev Hiba sayed Rahul Chawla Pooja Malde Nikon Bhatt Rohan

Patel PG12007 PG12036 PG12055 PG12076 PG12096 PG12110 PG12097

Financial Exclusion

Signifies the lack of access by certain segments of the society to appropriate, lowcost, fair and safe financial products and services from mainstream providers.

Financial Inclusion
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.
-Committee Report on Financial Inclusion in India (Chairman: C Rangarajan)

Need for Financial Inclusion

Providing formal credit avenues

Plug gaps in public subsidies and welfare programmes Creating a platform for inculcating the habit to save money

To create financial soundness & literacy

Objectives Of Financial Inclusion

Banking to 6,00,000 Villages
Savings+ OD a/c

Delivery Model : Cost centric Revenue Generational

Entrepren eurial Credit

Delivery of Banking services

EBT for Remittances

Quality Banking services@ doorstep

Pure savings Product (RDS)

Highlights :Initiatives by RBI

Expansion Of Banking Infrastructure
% of Households Availing Banking Services
80 70 60 Axis Title 50 40 30 20 10 0 Rural Urban 2001 30.1 49.5 2011 54.4 67.8

Opening No frills accounts Relaxation Of KYC norms Engaging Business Correspondents Setting up of USBs Simplified Branch authorization Adoption of EBT- leveraging ICT GCC Hassle Free credit

Each Household to have at least one bank account

Benefits of Financial Inclusion

Increasing the demand for credit.
Remittance of money.

Basic Saving Bank Account. Immediate credit.

Entrepreneurial credit.

Less Documentation. Direct cash transfer

Issues & Challenges

Infrastructural Limitations
The Viability Gap Recovery Miniscule part of the portfolio No Frills Account Electronic Benefit Transfer

Issues & Challenges

The Banking Correspondent Model

Infrequent Service Attrition rate Intentional delay to earn interest Outsourcing

ICT related Problems No proper functioning of utilities Limited number of service centres Availability of trained manpower

Issues & Challenges

Internet Fraud Security measures

Second Factor Authentication Card Not Present transaction Card Present transaction

SWABHIMAAN
Initiative by Government of India and Indian Banking Association Launched in Feb 2011 by Pranab Mukherjee in his Budget Speech 2012-13 Aim of Swabhimaan is to provide banking services to 74000 unbanked villages with population of 2000 or more

SWABHIMAAN
Special Provisions for North-Eastern Hilly Regions

Services provided by banks under Swabhimaan Campaign

Goal to provide branchless banking through technology Banks to provide basic services like deposits, withdrawals, remittances using Bank Saathi Enables Government to transfer subsidies and social security benefits

SWABHIMAAN
Micro-insurance and Micro-pension to reach the masses using this banking infrastructure Banking facilities include savings bank, Recurring Deposits, FDs , Overdraft facilities, Kisan Credit Card(KCC), GCC and collection of cheques Aim to promote financial literacy in India

SWABHIMAAN
Swabhimaan programme to be closely monitored by State-Level Bankers Committee Mechanism
District Magistrates / Collectors to assists in monitoring process Farmers to get access to easy credit and thereby avoid exploitations from informal moneylenders

Update on Financial Inclusion Swabhimaan

Financial Inclusion has been expanding

Current status- Swabhimaan

Roll out of Direct Benefit Transfer

Setting up of Small Ultra branches

Extension of Swabhimaan Scheme to North Eastern Regions Kisan Credit Card Scheme

RBI launched multilingual website in 13 languages

Current status- Swabhimaan

Use of Handheld Devices and Biometric Cards

Various Sub Schemes under the Swabhimaan Campaign by Public Sector Banks

Banking Penetration has increased

Cost of Financial Inclusion

Recommendations
Partnership with dedicated NGOs and Microfinance Institutions (MFIs)

Mobile banking

Lending by banks directly to SHGs

Recommendations .
Financial literacy programme

Financial inclusion as a part of Course Curriculum

Establishment of Financial Counseling Centers

Recommendations
Mobile banking vans

Importance to role of post office

Effective use of information technology solutions

Recommendations
Procedural/ Documentation changes

Encourage more companies like FINO

Creation of one multilateral agency