Financial Inclusion PDF

SUMMER PROJECT REPORT
ON
A study to understand the Banking Behavior of the Financially
Included rural population in Madurai district
Under the Guidance of
Smt Madhavi Sharma
General Manager
!ural "lanning and #redit $epartment
!eserve Bank of India
#hennai
By
#handrakumar B
%&'() *#lass of %'('+
April June 2009
Bharathidasan Institute of Management
(School of Excellence of Bharathidasan University)
,iruchirapalli -%''(.
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
A Study to understand Banin! Behaviour of the "inancially #ncluded $ural %opulation
&ontents
ACKNOWLEDGEMENT 5
EXECUTIVE SUMMARY 6
INTRODUCTION ................................................................................................................................ 7
OBJECTIVES OF THE RESERVE BANK OF INDIA ..................................................................................................... 8
MAIN FUNCTIONS .................................................................................................................................. 9
CHAPTER ! RURAL PLANNING AND CREDIT DEPARTMENT "#
INTRODUCTION .............................................................................................................................. "#
BROAD WORK AREAS OF THE DEPARTMENT ................................................................................................... "#
THRUST AREAS .................................................................................................................................... ""
IMPORTANT ASPECTS RELATING TO PRIORITY SECTOR LENDING BY COMMERCIAL BANKS ....................................................... ""
CHAPTER $! FINANCIAL INCLUSION "$
INTRODUCTION .............................................................................................................................. "$
CONCEPTUAL FRAMEWORK ....................................................................................................................... "%
FACTORS AFFECTING ACCESS TO FINANCIAL SERVICES .......................................................................................... "6
INITIATIVES OF FINANCIAL INCLUSION IN INDIA .................................................................................................. "7
CHAPTER %! MADURAI DISTRICT PROFILE
CHAPTER 5! RESEARCH METHODOLOGY %
PROCEDURAL STEPS FOLLOWED FOR THE SURVEY ......................................................................... 5
VILLAGES AND BANK BRANCHES VISITED ........................................................................................................ 6
LIMITATIONS OF THE STUDY ....................................................................................................................... 6
CHAPTER 6! OBSERVATIONS 7
OBSERVATIONS WITH NO&FRILLS ACCOUNT HOLDERS .................................................................... 7
BANKER'S PERSPECTIVE OF FINANCIAL INCLUSION ............................................................................................... $7
GENERAL OBSERVATIONS ......................................................................................................................... $9
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
CHAPTER 7! BUSINESS CORRESPONDENT MODEL %$
OPERATIONS OF A BUSINESS CORRESPONDENT ............................................................................. %%
PICTORIAL REPRESENTATION ..................................................................................................................... %5
CHAPTER 8! RECOMMENDATIONS ( CONCLUSION %9
RECOMMENDATIONS FOR IMPROVEMENT .................................................................................... 5#
IMPLEMENTATION MODEL ........................................................................................................................ 5
CONCLUSION ...................................................................................................................................... 5%
ANNEXURE&I! )UESTIONNAIRE FOR COMMON MAN 55
ANNEXURE&II! )UESTIONNAIRE FOR BANK BRANCHES 59
ANNEXURE&III! NEWS ARTICLE 6"
REFERENCES 6
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Ackno/ledgement
My sincere thanks to S*+,. F.R. J-./0*1 F-+2/+ R/3,-456 D,+/78-+1 C*/445, for giving me an
opportunity to undertake project in Reserve Bank of India and for guiding me in the initial
stages of the project y ringing in more clarity to the topic!
" #ord of thanks to S*+,. K. R. A4549*51 R/3,-456 D,+/78-+1 C*/445, for his constant
support for the project!
I also thank my mentor officer S28. M59*5:, S*5+251 G/4/+56 M5453/+1 RPCD #ho #as a
constant source of encouragement throughout the project!
" special mention to my project guide S28. C*549,4, M--67*549*54,1 D/0;8< G/4/+56
M5453/+1 RPCD is the least I can do to ackno#ledge her incisive and meaningful insights$
#hich instilled matchless attriutes to my project!
I thank all the officers and staff of RP%& for e'tending all help and assistance during the
project!
I also thank the (eads of all the &epartments #ho helped me y giving more clarity during
project title identification stage!
I thank (R& cell officers for e'tending their support and making all arrangement during my
project! )hey have made my stay in RBI a memorale one!
B. C*549+5=;25+
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
01ecutive Summary
)he anking system has gro#n enormously in the last five years keeping pace #ith and in
some cases leading the country*s remarkale economic gro#th! Simultaneously$ the anking
system has improved its strength$ efficiency and resilience! )here have also een significant
improvements in the payments and settlements system and electronic payments and R)+S
is no# much more in use! "t the same time$ large numer of households continues to e
e'cluded from the formal anking system! )he greatest challenge faced y the anking
sector and the government is to enale an
inclusive gro#th environment in the country!
,inancial inclusion has to e an urgent national
priority if #e are to achieve inclusive gro#th! In
spite of the measures taken y RBI to provide -o.
,rills accounts to everyody$ it is seen that the
usage level is very lo# as compared to the
e'pected level! ,inancial Inclusion can ecome a
profitale and eneficial programme only if the account holders practice a healthy anking
hait! )his ojective of this study is to understand the anking ehavior of the -o.,rills
account holders and the anker/s perspective on ,inancial Inclusion!
%hapter 0 e'plains aout the ojective and functions of Reserve ank of India and chapter 2
roadly discusses aout the Rural Planning and %redit &epartment in #hich the project #as
undertaken! %hapter 1 discusses on ,inancial Inclusion and chapter 2 gives a rief note
aout Madurai district in #hich the study #as conducted! %hapters 3 and %hapter 4 e'plain
the research methodology follo#ed for the study and various 5uantitative and 5uantitative
oservations made during the project! %hapter 6 pictorially riefs the Business
%orrespondent model! )he report concludes #ith the recommendations and conclusion in
chapter 7!
#hapter (2 A3out !eserve Bank of India
8jective of the study
1. To understand the banking
behaviour of the No-Frills
account holders in rural area
2. To study the bankers
perception on Financial
Inclusion
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Introduction
)he Reserve Bank of India #as estalished on "pril 0$ 0913 in accordance #ith the
provisions of the Reserve Bank of India "ct$ 0912! )he Bank egan its operations y taking
over from the +overnment the functions so far eing performed y the %ontroller of
%urrency and from the Imperial Bank of India$ the management of +overnment accounts
and pulic det!
)he %entral 8ffice of the Reserve Bank #as initially estalished in %alcutta ut #as
permanently moved to Mumai in 0916! )he %entral 8ffice is #here the +overnor sits and
#here policies are formulated! )he e'isting currency offices at %alcutta$ Bomay$ Madras$
Rangoon$ 9arachi$ :ahore and %a#npore ;9anpur< ecame ranches of the Issue
&epartment! 8ffices of the Banking &epartment #ere estalished in %alcutta$ Bomay$
Madras$ &elhi and Rangoon! )hough originally privately o#ned$ since nationali=ation in
0929$ the Reserve Bank is fully o#ned y the +overnment of India!
Burma ;Myanmar< seceded from the Indian >nion in 0916 ut the Reserve Bank continued
to act as the %entral Bank for Burma till ?apanese 8ccupation of Burma and later up to "pril$
0926! "fter the partition of India$ the Reserve Bank served as the central ank of Pakistan up
to ?une 0927 #hen the State Bank of Pakistan commenced operations! )he Bank$ #hich #as
originally set up as a shareholder*s ank$ #as nationali=ed in 0929!
"n interesting feature of the Reserve Bank of India #as that at its very inception$ the Bank
#as seen as playing a special role in the conte't of development$ especially "griculture!
@hen India commenced its plan endeavours$ the development role of the Bank came into
focus$ especially in the si'ties #hen the Reserve Bank$ in many #ays$ pioneered the concept
and practise of using finance to cataly=e development! )he Bank #as also instrumental in
institutional development and helped set up institutions like the &eposit Insurance and
%redit +uarantee %orporation of India$ the >nit )rust of India$ the Industrial &evelopment
Bank of India$ the -ational Bank of "griculture and Rural &evelopment$ the &iscount and
,inance (ouse of India etc! to uild the financial infrastructure of the country!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
@ith lierali=ation$ the Bank*s focus has shifted ack to core central anking functions like
Monetary Policy$ Bank Supervision and Regulation$ and 8verseeing the Payments System
and onto developing the financial markets!
'()ectives of the $eserve Ban of #ndia
)he Reserve Bank of India "ct$ 0912 sets out the ojectives of the Reserve BankA )he
formulation$ frame#ork and institutional architecture of
monetary policy in India have evolved around these
ojectives B maintaining price staility$ ensuring ade5uate
flo# of credit to sustain the gro#th momentum$ and
securing financial staility!
)he responsiility for ensuring financial staility has entailed
the vesting of e'tensive po#ers in and operational
ojectives for the Reserve Bank for regulation and
supervision of the financial system and its constituents$ the
money$ det and foreign e'change segments of the financial
markets in India and the payment and settlement system! )he endeavor of the Reserve
Bank has een to develop a roust$ efficient and diversified financial system so as to anchor
financial staility and to facilitate effective transmission of monetary policy! In addition$ the
Reserve Bank pursues operational ojectives in the conte't of its core function of issuance
of ank notes and currency management as #ell as its agency functions such as anker to
+overnment ;%entre and States< and management of pulic detC anker to the anking
system including regulation of ank reserves and the lender of the last resort!
)he specific features of the Indian economy$ including its socio.economic characteristics$
make it necessary for the Reserve Bank to operate #ith multiple ojectives! Regulation$
supervision and development of the financial system remain #ithin the legitimate amit of
monetary policy roadly interpreted in India! )he role of communication policy$ therefore$
lies in articulating the hierarchy of ojectives in a given conte't in a transparent manner$
emphasi=ing a consultative approach as #ell as autonomy in policy operations and harmony
#ith other elements of macroeconomic policies!
*...to regulate the issue of
Bank notes and the keeping
of reserves with a view to
securing monetary stability
in India and generally to
operate the currency and
credit system of the country
to its advantage.*
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Main Functions
". M-4/85+< A;8*-+,8<!
,ormulates$ implements and monitors the monetary policy!
8jectiveA maintaining price staility and ensuring ade5uate flo# of credit to
productive sectors!
. R/3;658-+ 549 .;0/+:,.-+ -> 8*/ >,4547,56 .<.8/2!
Prescries road parameters of anking operations #ithin #hich the country*s
anking and financial system functions!
8jectiveA maintain pulic confidence in the system$ protect depositors* interest
and provide cost.effective anking services to the pulic!
$. M5453/+ -> F-+/,34 E?7*543/
Manages the ,oreign D'change Management "ct$ 0999!
8jectiveA to facilitate e'ternal trade and payment and promote orderly
development and maintenance of foreign e'change market in India!
%. I..;/+ -> 7;++/47<!
Issues and e'changes or destroys currency and coins not fit for circulation!
8jectiveA to give the pulic ade5uate 5uantity of supplies of currency notes and
coins and in good 5uality!
5. D/:/6-02/4856 +-6/
Performs a #ide range of promotional functions to support national ojectives!
6. R/658/9 F;478,-4.
Banker to the +overnmentA performs merchant anking function for the central
and the state governmentsC also acts as their anker!
Banker to anksA maintains anking accounts of all scheduled anks!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
#hapter %2 !ural "lanning and #redit $epartment
Introduction
)he Rural Planning and %redit &epartment formulates policies relating to rural credit and
monitors timely and ade5uate flo# of credit to the rural population for agricultural activities
and rural employment programmes! It also formulates policies relating to the priority sector
#hich includes agriculture$ small.scale industries$ tiny and village industries$ artisans and
retail traders$ professional and self.employed persons$ state sponsored organisations for
Scheduled %astes and Scheduled )ries and +overnment Sponsored credit.linked
programmes like S#arnjayanti +ram S#arojgar Eojana ;S+SE<$ Prime Ministers Rojgar
Eojana ;PMRE< etc! It implements and monitors the :ead Bank Scheme #hich is aimed at
forging a coordinated approach for providing ank credit to achieve overall development of
rural areas in the country! )he department also oversees implementation of the Banking
8mudsman Scheme!
Broad 4ork Areas of the $epartment
Monitoring and facilitating flo# of credit to rural$ agricultural and small scale
industries* sectors!
,raming policies on priority sector lending!
Making allocations for contriution to Rural Infrastructure &evelopment ,und ;RI&,<
amongst scheduled commercial anks!
Implementing and monitoring :ead Bank Scheme #hich aims at forging a co.
ordinated approach for providing ank credit to achieve overall rural development!
+iving financial and policy support to -"B"R&!
"cting as regulators for Regional Rural Banks and StateF%entral %o.operative Banks!
Monitoring implementation of +overnment.sponsored poverty alleviation schemes!
Implementation of Banking 8mudsman SchemeA " scheme set up y the Reserve
Bank of India to give memers of pulic an easy and ine'pensive forum for redressal
of their grievances against anks!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
,hrust Areas
%redit delivery innovations
Micro finance initiatives
9issan credit cards
Restructuring co.operatives
,raming guidelines for rehailitation of sick SSIs
Important aspects relating to priority sector lending 3y commercial
3anks
I. T5+3/8.@S;A&T5+3/8.
)he targets and su.targets set under priority sector lending for domestic and foreign anks
operating in India areA
C58/3-+< -> 59:547/. D-2/.8,7 A54=. F-+/,34 A54=. ,4 I49,5
"ggregate advances to
priority sector
20 per cent of net ank
credit
credit
"dvances to agriculture 07 per cent of net ank
credit
-o target
"dvances to #eaker
sections
credit
-o target
"dvances to SSI -o target 00 per cent of net ank
credit
D'port ,inance D'port finance does not
form part of priority sector
for domestic anks
credit
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
II. A78,:,8,/.
Broadly$ the activitiesF purposes financed y anks included in priority sector areA
a! "griculture
! Small scale industry
c! Small road and #ater transport operators
d! Retail traders and small usiness operators
e! Professional and self.employed persons
f! State.sponsored organisations for Scheduled %asteFScheduled )rie$
g! Dducational loans$ up to Rs! 0!63 million for studies #ithin the country and Rs! 0!3 million for
studies aroad!
h! (ousing up to Rs! 0!3 million in all areas for ac5uisition y individual! Rs! 0!0 million in
ruralFsemi uran areas and Rs! 0!2 million in uranFmetropolitan areas for repairing of
e'isting unit<
i! %onsumption loans for #eaker sections$
j! Self (elp +roupsF -on +overnmental 8rganisations$
k! Soft#are industry ;having credit limits up to Rs 00 million from the anking system<
l! ,ood and agro ased processing sector
III. W/5=/+ S/78,-4.
)he categories of orro#ers included under #eaker sections areA
i! Small and marginal farmers #ith land holdings of five acres and less$ landless laourers$
tenant farmers and sharecroppersC
ii! "rtisans$ village and cottage industries #here individual credit re5uirements do not e'ceed
Rs! 30$000 C
iii! Beneficiaries of S#arnjayanti +ram S#aro=gar Eojana ;S+SE<$ S#arna ?ayanti Shahari Ro=gar
Eojana ;S?SRE< and Scheme for :ieration and Rehailitation of Scavangers ;S:RS<C
iv! Scheduled castes and scheduled triesC
v! Beneficiaries under the &ifferential Rate of Interest ;&RI< schemeC
vi! Self (elp +roups
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
#hapter )2 Financial Inclusion
Introduction
"ccess to safe$ easy and affordale credit and other financial services y the poor and
vulnerale groups$ disadvantaged areas and lagging sectors is recognised as a pre.condition
for accelerating gro#th and reducing income disparities and poverty! "ccess to a #ell.
functioning financial system$ y creating e5ual opportunities$ enales economically and
socially e'cluded people to integrate etter into the economy and actively contriute to
development and protects themselves against economic shocks! &espite the road
international consensus regarding the importance of access to finance as a crucial poverty
alleviation tool$ it is estimated that gloally over t#o illion people are currently e'cluded
from access to financial services ;>nited -ations$ 2004a<! In most developing countries$ a
large segment of society$ particularly lo#.income people$ has very little access to financial
services$ oth formal and semi.formal! "s a conse5uence$ many of them have to necessarily
depend either on their o#n or informal sources of finance and generally at an unreasonaly
high cost! )he situation is #orse in most least developed countries ;:&%s<$ #here more than
90 per cent of the population is e'cluded from access to the formal financial system ;>nited
-ations$ 2004a<!
)heories of development advocate that financial development creates enaling conditions
for gro#th through either a Gsupply.leading/ ;financial development spurs gro#th< or a
Gdemand.follo#ing/ ;gro#th generates demand for financial products< channel! Darlier
theories of development hypothesised that a rise in ine5uality #as inevitale in the early
stages of development! )he early literature on the suject focussed on the need to develop
an e'tensive financial system that could tap savings and then channel the funds so
generated to a #ide spectrum of activities! )he modern development theory perceives the
lack of access to finance as a critical factor responsile for persistent income ine5uality as
#ell as slo#er gro#th! " large ody of empirical literature suggests that developing the
financial sector and improving access to finance may accelerate economic gro#th along #ith
a reduction in income ine5uality and poverty! @ithout an inclusive financial system$ poor
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
individuals and small enterprises have to rely on their o#n limited savings and earnings to
invest in their education and entrepreneurship to take advantage of gro#th opportunities
;@orld Bank$ 2007<!
In India$ gro#th #ith e5uity has een the central ojective right from the inception of the
planning process! "ccordingly$ over the years$ initiatives have een taken continuously y
the +overnment and the Reserve Bank to address the issue of inclusive gro#th!
-ot#ithstanding the rapid increase in overall +&P and per capita income in recent years$ a
significant proportion of the population in oth rural and uran areas still e'periences
difficulties in accessing the formal financial system! Recent concerns have arisen from an
inade5uate reduction in poverty levels$ sectoral divergences in gro#th and employment
opportunities and tardy improvement in other social indicators$ despite higher economic
gro#th! )he Dleventh ,ive Eear Plan$ therefore$ re.emphasised the need for a more inclusive
gro#th in order to ensure that the per capita income gro#th is more road.ased! )he
farming$ micro$ small and medium enterprises have immense potential to play a critical role
in achieving the ojective of faster and more inclusive gro#th as these sectors contriutes
to output and employment generation in a significant #ay #ith capacity to e'pand
regionally diversified production and generating #idely dispersed off.farm employment!
#onceptual Frame/ork
&efinitions of financial e'clusion in the literature vary depending on the dimensions such as
Greadth/$ Gfocus/ and Gdegree/ of e'clusion!
)he Greadth/ dimension is the roadest of all definitions linking financial e'clusion
to social e'clusion #hich defines financial e'clusion as the processes that prevent
poor and disadvantaged social groups from gaining access to the financial system
;:eyshon and )hrift$ 0993<!
)he Gfocus/ dimension is in the middle of the spectrum that links financial e'clusion
to other dimensions of e'clusion! It defines financial e'clusion as the potential
difficulties faced y some segments of population in accessing mainstream financial
services such as ank accountsFhome insurance ;Meado#s et al!$ 2002<! )he
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
definitions laying emphasis on the Gfocus/ also vary significantly to include various
segments of population such as individuals$ households$ communities$ and
usinesses!
)he Gdegree/ dimension$ #hich is the narro#est of all definitions of financial
e'clusion$ defines financial e'clusion as e'clusion from particular sources of credit
and other financial services including insurance$ ill.payment services and accessile
and appropriate deposit accounts ;Rogaly$ 0999<!
,inally$ definitions of financial e'clusion vary consideraly according to the dimensions
such as the concept of relativity$ i!e!$ financial e'clusion defined relative to some
standard ;i!e!$ inclusion<! )his line of thinking defines the prolem of financial e'clusion
as that emanating from increased inclusion$ leaving a minority of individuals and
households ehind ;9empson et al!$ 2000<!
)hus$ there e'ists duality of hyper inclusion #ith some having access to a range of
financial products and at the same time a minority lacking even the asic anking
services! )his phenomenon is oserved mostly in developed countries #ith high degree
of financial development!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
8ver the years$ several definitions of financial inclusionFe'clusion have evolved! :isted
elo# are fe# definitions of financial inclusion!
Author $efinition
Stephen " Sinclair *%''(+ ,inancial e'clusion means the inaility to access necessary
financial services in an appropriate form! D'clusion can come
aout as a result of prolems #ith access$ conditions$ prices$
marketing or self.e'clusion in response to negative
e'periences or perceptions!
United 5ations *%''- 3+ " financial sector that provides Gaccess/ to credit for all
Gankale/ people and firms$ to insurance for all insurale
people and firms and to savings and payments services for
everyone! Inclusive finance does not re5uire that everyone
#ho is eligile use each of the services$ ut they should e
ale to choose to use them if desired!
!eport of the #ommittee on
Financial Inclusion in India
*#hairman2 #!angara6an+
*%''7+
)he process of ensuring access to financial services and
timely and ade5uate credit #here needed y vulnerale
groups such as #eaker sections and lo# income groups at an
affordale cost!
Factors Affecting Access to Financial Services
G/49/+ ,..;/.A "ccess to credit is often limited for #omen #ho do not have$ or
cannot hold title to assets such as land and property or must seek male guarantees
to orro#!
A3/ >578-+A ,inancial service providers usually target the middle of the economically
active population$ often overlooking the design of appropriate products for older or
younger potential customers!
L/356 ,9/48,8<A :ack of legal identities like identity cards$ irth certificates or #ritten
records often e'clude #omen$ ethnic minorities$ economic and political refugees
and migrant #orkers from accessing financial services!
L,2,8/9 6,8/+57<A :imited literacy$ particularly financial literacy$ i!e!$ asic
mathematics$ usiness finance skills as #ell as lack of understanding often constrains
demand for financial services!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
P657/ -> 6,:,43A "lthough effective distance is as much aout transportation
infrastructure as physical distance$ factors like density of population$ rural and
remote areas$ moility of the population ;i!e!$ highly moile people #ith no fi'ed or
formal address<$ insurgency in a location$ etc!$ also affect access to financial services!
P.<7*-6-3,756 549 7;68;+56 A5++,/+.A )he feeling that anks are not interested to look
into their cause has led to self.e'clusion for many of the lo# income groups!
(o#ever$ cultural and religious arriers to anking have also een oserved in some
of the countries!
S-7,56 ./7;+,8< 05<2/48.A In those countries #here the social security payment
system is not linked to the anking system$ anking e'clusion has een higher!
B54= 7*5+3/.A In most of the countries$ transaction is free as long as the account has
sufficient funds to cover the cost of transactions made! (o#ever$ there are a range
of other charges that have a disproportionate effect on people #ith lo# income!
T/+2. 549 7-49,8,-4.A )erms and conditions attached to products such as minimum
alance re5uirements and conditions relating to the use of accounts often dissuade
people from using such productsFservices!
L/:/6 -> ,47-2/A ,inancial status of people is al#ays important in gaining access to
financial services! D'tremely poor people find it difficult to access financial services
even #hen the services are tailored for them! Perception arriers and income
discrimination among potential memers in group.lending programmes may e'clude
the poorer memers of the community!
T<0/ -> -77;058,-4A Many anks have not developed the capacity to evaluate loan
applications of small orro#ers and unorganised enterprises and hence tend to deny
such loan re5uests!
A88+578,:/4/.. -> 8*/ 0+-9;78A Both the financial servicesFproducts ;savings
accounts$ credit products$ payment services and insurance< and ho# their availaility
is marketed are crucial in financial inclusion
Initiatives of Financial Inclusion in India
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
,inancial inclusion in the Indian conte't implies the provision of affordale financial services$
vi=!$ access to payments and remittance facilities$ savings$ loans and insurance services y
the formal financial system to those #ho tend to e e'cluded!
In order to e'pand the credit and financial services to the #ider sections of the population$ a
#ide net#ork of financial institutions has een estalished over the years! )he organised
financial system comprising commercial anks$ regional rural anks ;RRBs<$ uran co.
operative anks ;>%Bs<$ primary agricultural credit societies ;P"%S< and post offices caters
to the needs of financial services of the people! Besides$ M,Is$ self.help groups ;S(+s< also
meet the financial service re5uirements of the poorer segments! ,urthermore$ development
of the institutional frame#ork in recent years has focussed on ne# models of e'panding
financial services involving credit dispensation using multiple channels such as civil society
organisations ;%S8s<$ nongovernment organisations ;-+8s<$ post offices$ farmers/ clus$ and
panchayats as usiness facilitatorsFcorrespondents! Specific financial instrumentsFproducts
#ere also developed in order to promote financial inclusion!
)he road strategy for financial inclusion in India in recent years comprises the follo#ing
elementsA
a! encouraging penetration into unanked and ack#ard areas and encouraging agents
and intermediaries such as -+8s$ M,Is$ %S8s and usiness correspondents ;B%s<
! focussing on a decentralised strategy y using e'isting arrangements such as State
:evel Bankers/ %ommittee ;S:B%< and district consultative committee ;&%%< and
strengthening local institutions such as co.operatives and RRBs
c! using technology for furthering financial inclusion
d! advising anks to open a asic anking Gno frills/ account
e! emphasis on financial literacy and credit counselling
f! creating synergies et#een the formal and informal segments
)he ojective of ringing financially e'cluded people #ithin the fold of the anking sector
received rene#ed emphasis in 2003.04 as the term Gfinancial inclusion/ #as e'plicitly used
for the first time in the "nnual Policy Statement for 2003.04! It oserved that there #ere
legitimate concerns in regard to the anking practices that tended to e'clude rather than
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
attract vast sections of population$ in particular pensioners$ self.employed and those
employed in the unorganised sector
)he process of financial inclusion received further impetus in -ovemer 2003$ #hen anks
#ere advised to make availale a asic anking G-o ,rills/ account #ith lo# or nil minimum
alances as #ell as charges to e'pand the outreach of such accounts to vast sections of the
population! )he lo# cost or free of cost account is internationally considered to e helpful in
e'panding the access of anking services$ particularly to the lo# income groups!
C58/3-+< E49&M5+7* E49&M5+7* E49&D/7/2A/+
2004 2006 2006
Pulic Sector Banks 1$12$767 37$43$209 0$00$24$409
Private Sector
Banks 0$34$177 7$34$293 03$40$307
,oreign anks 210 2$631 10$240
)otal 2$79$296 46$22$446 0$24$06$196
N-&F+,66. 577-;48.!
"s a proactive measure$ the RBI in its "nnual Policy Statement for the year 2003.04$ #hile
recognising the concerns in regard to the anking practices that tend to e'clude rather than
attract vast sections of population$ urged anks to revie# their e'isting practices to align
them #ith the ojective of financial inclusion! In the Mid )erm Revie# of the Policy ;2003.
04<$ the RBI e'horted the anks$ #ith a vie# to achieving greater financial inclusion$ to make
availale a asic anking Gno frills/ account either #ith nil or very minimum alances as #ell
as charges that #ould make such accounts accessile to vast sections of the population! )he
nature and numer of transactions in such accounts #ould e restricted and made kno#n
to customers in advance in a transparent manner! "ll anks have een urged to give #ide
pulicity to the facility of such Gno frills/ account! " numer of anks have since come out
#ith schemes for such Gno frills/ account facility!
R/65?58,-4 -> KYC 4-+2.!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
In order to ensure that persons elonging to lo# income groups$ oth in uran and rural
areas do not encounter difficulties in opening ank accounts$ the kno# your customer ;9E%<
procedure for opening accounts #as simplified for those accounts #ith alances not
e'ceeding Rs!30$000 and credit limits not e'ceeding Rs!000$000 in a year! )he simplified
procedure allo#ed introduction y a customer on #hom the full 9E% drill had already een
done!
G/4/+56 P;+0-./ C+/9,8 C5+9!
In uran areas$ credit cards enale households to manage to get their credit needs met y
the anking system$ #ith not only the aility to make purchases on credit ut also facility to
dra# cash against card! In the rural areas$ there are no points of sale or outlets #here
plastic cards can e used! Banks have een recently advised y RBI to provide a +eneral
purpose %redit %ard ;+%%< facility at their rural and semi uran raches! )he credit facility
e'tended under the Scheme #ill e in the nature of revolving credit! )he +%%.holder #ill e
entitled to dra# cash from the specified ranch of ank up to the limit sanctioned! Banks
#ould have fle'iility in fi'ing the limit ased on the assessment of income and cash flo# of
the entire household! (o#ever$ the total credit facility under +%% for an individual should
not e'ceed Rs!23$000! Interest rate on the facility may e charged as considered appropriate
and reasonale! )he orro#ers #ould e eligile for availing the credit facilities provided
under +%%$ as per their re5uirement$ #ithout any insistence on security and the purpose or
end.use of the credit! ,ifty per cent of credit outstanding under +%% up to Rs!23$000 #ill e
eligile for eing treated as indirect agricultural financing coming under the amit of priority
sector lending norms! )he eligiility criteria #ill e suject to revie#! It is not necessary that
+%% should e linked to purchases and +%% may not necessarily e in the form of a card!
+%% can e issued in the form of a Pass Book$ if the holder of +%% desires to operate cash
#ithdra#als from ank ranches! It is e'pected that anks #ill come out #ith their o#n
schemes to popularise this product amongst the rural clientele! Based on assessment of
household cash flo#s$ the limits are sanctioned! Interest rate on the facility is completely
deregulated! ,ifty per cent of +%% loans are treated as priority sector lending!
B;.,4/.. C-++/.0-49/48!
In ?anuary 2004$ the Reserve Bank$ permitted anks to utilise the services of -+8sF S(+s$
M,Is ;other than -B,%s< and other civil society organisations as intermediaries for providing
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
financial and anking services through the use of usiness facilitator ;B,< and usiness
correspondent ;B%< models! In "pril 2007$ anks #ere permitted to engage retired ank
employees$ e'.servicemen and government employees as B%s$ suject to appropriate due
diligence! )he B% model allo#s anks to do Gcash in . cash out/ transactions at a location
much closer to the rural population$ thus$ addressing the last mile prolem! Banks are also
entering into agreements #ith Indian Postal authorities for using the enormous net#ork of
post offices as B%s$ therey increasing their outreach! In order to provide social security to
vulnerale groups$ in some cases anks have provided$ in association #ith insurance
companies$ innovative insurance products at affordale cost$ covering life disaility and
health cover! S(+s and M,Is are also eing used e'tensively for financial inclusion on the
credit side!
8ne of the major differences et#een the usiness facilitator and usiness correspondent is
usiness facilitators #ill not e involved in any financial activity #hile they #ill e involved
in survey$ counselling and account opening! @hile usiness correspondents act as an
intermediary and process any transaction et#een ank and the customer! )hey involve in
all financial activities in granting loans and collecting deposits and giving it to anks!
R-6/ -> F-+/,34 B54=. 549 P+,:58/ B54=.!
)he foreign anks and private sector anks have approached the access issue through either
setting up relatively lo#er cost non ank companies for providing small value retail loans or
have partnered #ith micro finance institutions that provide financial services to the
relatively higher risk segments of the population! Microfinance has dra#n attention to an
entire sector of orro#ers #ho had een previously poorly served y the formal financial
sector . and M, has demonstrated ho# to make lending to this sector a viale proposition!
(o#ever the rates of interest charged are 5uite high$ typically 22 to 10 percent$ mainly on
account of the high transaction cost for the average loan si=e that can e 5uite small!
%ompared to the informal sector$ perhaps the rates are lo#er$ ut issues are raised #hether
these rates are affordale . in the sense #hether they #ould leave any surplus in the hands
of the orro#ers and lead to higher levels of living!
IT S-6;8,-4. >-+ F,4547,56 I476;.,-4!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
)he use of I) solutions for providing anking facilities at doorstep holds the potential for
scalaility of the ,I initiatives! Pilot projects have een initiated using smart cards for
opening ank accounts #ith iometric identification! :ink to moile or hand held
connectivity devices ensure that the transactions are recorded in the ank/s ooks on real
time asis! Some State +overnments are routing social security payments and also
payments under the -ational Rural Dmployment +uarantee Scheme through such smart
cards! )he same delivery channel can e used to provide other financial services like lo#
cost remittances and insurance! )he use of I) also enales anks to handle the enormous
increase in the volume of transactions for millions of households for processing$ credit
scoring$ credit record and follo# up!
In order to have a etter understanding of the ,inancial Inclusion and to study #hy the
usage of -o.,rills accounts is too lo#$ Madurai &istrict #as identified for the study!
#hapter .2 Madurai $istrict "rofile
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
)he +eographical e'tent of Madurai &istrict is 1620!61 s5!km! accounting for 2!9H of
the geographical area of )amilnadu state
)here are t#o revenue
divisions and 01 locks in
the district! )here are 394
villages and 232 ank
ranches in the district
)he total population is
aout 23!42 :akhs
comprising of 02!93 :akhs
males and 02!46 :akhs
females as per 2000 census
)he district has #ell laid out roads and rail#ay lines connecting all major to#ns
#ithin and outside the state
Madurai &istrict is classified into 4 su.=ones ;Southern Plateau and hill region<
under =one ' among 01 agro.climatic =ones in the country! -ormally su.tropical
climate prevails over the district #ithout any sharp variation! )he district possess
very good communication net#ork
)he average rainfall of the district is 713!1 mm! )here are four distinct season vi=!$
South.@est Monsoon$ -orth.Dast Monsoon$ #inter and summer! Iaigai is a major
river in the district originating in the @estern +hats! )he major sources of irrigation
are y canals and #ells!
)he types of soil availale in the district are thin red$ deep red$ red sterile$ lack and
red sandy! "s regards mineral resources$ lime stone deposits$ granite etc is availale
in the district
)he district is asically agrarian ased and also offers scope in the field of te'tiles$
readymade garments$ dairying$ floriculture$ coir units$ akery units$ rick klin$ toy
making etc!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
#hapter &2 !esearch Methodology
In order to understand the anking ehaviour of financially included rural population$
Madurai district #as identified as the region of study!
)he methodology follo#ed #as primary data collection through 5uestionnaire survey and
in.depth intervie# techni5ue
)#o 5uestionnaires #ere prepared for the study!
Juestionnaire for the ank ranches
Juestionnaire for the -o.,rills account holders
)he 5uestionnaire for -o.,rill account holders contains 21 5uestions and #as designed in
order to get the details related to the financial hait$ anking ehaviour and credit planning!
)he 5uestionnaire also contains open 5uestions in order to record their vie#s on lo# usage
of ank accounts! )he 5uestionnaire #as designed #ith multiple choice and dichotomous
5uestions!
)he 5uestionnaire for the Bank Managers contains 03 5uestions and it majorly focussed on
the strategies follo#ed y anks in order to encourage people to open -o.,rills accounts
and the steps taken y them to motivate fre5uent ank account usage! )his 5uestionnaire
majorly contains open 5uestions in order to otain a descriptive opinion of the Managers!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
"rocedural Steps follo/ed for the Survey
)he procedural steps follo#ed for the research is schematically represented elo#!
S8/0 "A "fter the 5uestionnaire
0
#as designed$ the ne't step #as to identify the ank
ranches in the Madurai &istrict that could e taken for the study! >nder the guidance of
the :ead &istrict 8fficer of Madurai$ si' ank ranches #ere selected so as to geographically
cover all the locks in the &istrict!
S8/0 A )he identified si' ranches #ere visited and the 5uestionnaire #as administered to
the Bank Managers! )his 5uestionnaire majorly contained open 5uestions in order to otain
a descriptive opinion of the Managers
S8/0 $A @ith the help of the respective Bank Managers$ 2 or 1 villages in the service area of
the ank #as selected for study!
S8/0 %A )otally 9 villages #ere visited and 002 respondents #ere intervie#ed! )he
5uestionnaire #as e'plained to them in the local language and their ans#ers #ere recorded
in an intervie# format!
0
"nne'ure I K II
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
8illages and Bank Branches visited
,ollo#ing are the details of the Bank Branches and the villages visited for the survey$
S.
N-
B54= N52/ B6-7= N-. O> V,6653/.
7-:/+/9 A< 8*/
A54=
V,6653/. :,.,8/9 >-+ 8*/
.;+:/<
" %anara Bank$ 9allikudi 9allikudi 00 Ieeraperumalpuram
State Bank of India$
)herkutheru
Melur 04 )herkutheru
Semur
$ Indian 8verseas Bank$
"ppantirupathi
Madurai
Dast
00 Ielliyamkundram
% Indian Bank$
9arupayurani
Madurai
Dast
00 9arupayurani
"ndarkottaram
:! Poolangulam
5 State Bank of India$
Palamedu
"langanallur 22 Iellayampatti
6 State Bank of India$
Ialandur
%hellampatti 6 %hokkanthevanpatti
9imitations of the study
,ollo#ing are the limitations of the study
Project #as to e completed in a period of 2 months
)he study #as restricted to Madurai &istrict
-ot many of the -o.,rills account respondents #ere ready to share information
aout their possession of +old or (ouse
8nly t#o stake holders of the ,inancial Inclusion ;"ccount holders K Bankers< #ere
intervie#ed as a part of the project! Intervie# #ith all the stake holders could have
given a complete picture of the implementation of ,inancial Inclusion
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
#hapter -2 :3servations
:3servations /ith 5o;Frills account holders
" total of 002 respondents #ere randomly selected from 9 different villages for the survey!
8nly the primary data collected through the intervie# #as used for the analysis
)he sample composed of 49H male and 10H female respondents!
)he sample contains more female than male ecause in majority of the household
#omen sho#ed more interest to open a ank account for saving compared to the
male memer! Moreover more female registered themselves #ith the -RD+S and
hence possessed Bank passooks!
0ducation level2
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
"out 36H of the respondents did not have proper schooling
01H of them had education till 3
th
+rade and 27H of the respondents had schooling
till 02
th
grade
It #as also seen that 0H of the respondents #ere graduates and completed technical
studies like #elding$ tailoring$ teacher training etc!$
:ccupation of the respondents2
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
" majority of the respondents ;40H< #ere agricultural and non.agricultural laours
#ho #ere also registered for the -RD+S! )hey have opened the ank account after it
#as made mandatory for the -RD+S jos!
01H of them #ere farmers #ho o#ned cultivatale land!
"round 00H of them #orked in pulicFprivate sectors and these set of people #ere
involved in active savings through the saving schemes sponsored y the organisation
they #ork in!
"out 7H of them #ere (ouse#ives$ 2H of them #ere traders and 0H of the sample
#ere unemployed!
Income level2
"round 60H of the respondents lead their life #ith a monthly income of less than Rs! 0300
and 23H of them had savings in the range of Rs! 0300 to Rs! 1000 per month! "round 2H of
the respondents had monthly earnings in the range of Rs! 1000 to Rs! 3000!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Fre<uency of usage of Account holders2
)he district administration and the anks have taken efforts to make sure the district is
000H financially included primarily driving through the -RD+S y making it mandatory for
the jo card holders to possess a ank account! But it #as found that around 43H of the
account holders haven/t done any ank transaction and their passooks appear lank! 09H
of the respondents have made 0 to 1 ank transactions and they #ere found to possess a
sum of around Rs! 200! " total of 9H of the respondents have made 2 to 00 ank
transactions #hile 6H of them have made more than 00 transactions!
!eason for opening 5o;Frills account2
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Majority of the respondents ;42H< ans#ered that they have opened the account in
order to receive payments through +overnment schemes
)his #as majorly attriuted to the fact that Bank account opening #as made
mandatory for the -RD+S
03H of the respondents had the desire to avail loan from ank and it #as oserved
that these respondents #ere effectively utilising the je#el loan
8nly 02H of the respondents have e'pressed the interest to use ank account for
savings
&epositing che5uesF&& #as the reason for 4H of the respondents to open a ank
account and 1H of them felt that the ank account #as offered at their doorsteps
!easons for poor usage of Bank account2
" total of 90 respondents #hose ank account usage #as minimum #ere
intervie#ed the reason for poor usage
Bank/s location #as the reason constraint for the majority of the respondents ;27
respondents<
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
D5ually contriuting is that people have the perception that small amounts cannot
e saved in anks! Dven among the respondents the practise #as to save small
amount in their house and depositing the saved money in the ank once in a month!
In this process$ they tend to spend the saved money for consumption needs
01 respondents felt that the comple' process involved in the transaction #as the
reason for their poor usage
In fe# villages$ it #as oserved that even after the -o.,rills accounts #ere opened$
they #ere not provided #ith the Bank passooks! "s they have no means of
connection #ith the ank$ they tend to e detached from the ank!
Seven respondents felt that they have no a#areness aout the anking services!
Banks officials response for 5ueries and the Bank/s functioning time #ere other
reasons for the poor usage
Savings ha3it of the respondents2
It #as interesting to note that 94H of the respondents had the savings hait! )hough only a
fe# of them used Bank accounts for saving purpose$ rest had the practise of saving through
other informal means like keeping it safe in the house$ giving it to the relatives etc!$ Some of
them felt that they did not have enough money to save$ #hich is one of the reasons for the
lack of savings hait!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Savings is also found to e done through &i#ali fund #hich is operated y the petty shops!
)he individual has to pay Rs! 00 per #eek #hich #ould e redeemed in the form of groceries
and other items from the shop during &i#ali!
4hat is the purpose of saving=
" majority of the respondents ;appro' 17H< #ere oserved to e doing savings for
fulfilling their consumption needs! )hey do small savings like Rs! 3 per day #hich
#ould e mostly spent for groceries and other items depending on the need
8ne fourth of the respondents #ere doing savings #hich #ould e spent entirely on
social functions like daughter/s #edding! "part from the savings$ they also resort to
Money :enders to fill the gaps of the financial needs!
"round 06H of them are doing savings in order to provide education to their children
and 02H of respondents #ho #ere asically agriculture laours aspired to start a
small usinessFpetty shop of their o#n
PurchasingFRepairing the house$ "griculture needs #ere other reasons for savings of
the individuals
4hat is the preferra3le source of savings2
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
"round half of the respondents ;32 of 97< said that they have een doing savings y
keeping it in their house! )he inference of this hait is that the people lack in
financial literacy and they are ignorant aout other means of doing savings
Self (elp +roups play a major role in imiing savings hait in the people
00 respondents said that Post 8ffice #as their preferale source ecause they #ere
located #ithin their village premises
:I%FInsurance #as said to e the preferale source of saving y 00 respondents! )he
main reason #as that the :I% agent #ho usually used to e a relative or friend of the
individual goes to the doorsteps to collect the premium amount
%ooperative societies #ere found e the preferale source of saving for 6
respondents mainly due to their accessiility
8nly 2 respondents ;appro' 2H< #ere doing savings through anks
Some factories have also given a provision to save a fe# amount of money in their
o#n savings scheme! )his has got a positive response ecause the #orkers in the
factory can save a small amount of their #ages from the place #here they get the
#ages!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
!eason for saving through sources other than 3anks2
"out one third of the respondents #ho do not have savings hait through anks
said that they cannot #ithdra# the saved money at the time of emergency
"out 10H of the respondents felt that anks #ere not accessile #hile the other
sources #ere readily availale at their doorsteps
"ppro'imately 8ne.fourth of the respondents said that they #ere una#are of other
means of savings
"round 01H of thm felt that the ank transactions #ere not easy and convinient to
perform
S-;+7/ -> B-++-B,43!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Majority of the respondents ;appro' 43H< possess the hait of orro#ing from the
moneylenders
" fe# of them ;appro' 02H< orro# from their relatives and friends #hen the need
is small and usually they repay it on the ne't day
Borro#ing from Self (elp groups have enefitted 00H of the respondents and
generally it is seen that defaulting is very minimal due to the peer pressure in the
group
)otally 6H of the population have orro#ed from the %ooperative societies and 3H
of them through anks! Bank orro#ing generally happens throught the ?e#el loan
and it has enefitted the people as they possess some form of +old #ith them
People #ho orro# from the anks face the prolem of partial payment for the
project and they do not get the full amount re5uired! )his situation naturally drives
them to orro# from the Money lender for meeting the needs
R/5.-4 >-+ A-++-B,43 >+-2 M-4/< L/49/+!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Cattle grows along with the interest
It is been a practise in some villages that hen a houseife borros money
from a !oney "ender# she also buys a goat. $fter a year# she sells the ell
gron cattle to repay the money to the lender.
In spite of the fact that the Money lenders charge a higher interst rate$ a large population
prefers to orro# from them! Respondents #ho orro#ed from the Money lenders #ere
asked the reason for orro#ing from Money lenders! Majority of the people ;24H of the
respondents< depend on Money lenders ecause they have no other means of getting
credit! :esser procedure and documention involved is another attraction for availing the
Money lenders service! " Money lender typically does a Spot payment #ith Lero
documentation! "vailaility of cash at the time of emergency is the reason for the choice of
02H of the respondents! Mostly #hen the cash needs arise out of medical emergency$ it is
met only y the Money lenders as they ask for no documents or surelty and gives the cash in
hand! :ocation criteria and anytime access of cash are other reasons for orro#ing from
Money lenders
Banker>s perspective of Financial Inclusion
"ll
the
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
anks have rela'ed the 9E% norms for account opening! )hey open the account for a
person if heFshe is identified y the Makkal -ala Paniyalargal
2
:ocal -+8s and the Makkal -ala Paniyalargal have played a major role in
communicating the village people aout the account opening and for coordinating
them to the anks! )hey have also volunteered in account opening #ork
&oor to door campaign has een used y the ank in order to communicate and
create pulicity aout opening ank account! Pre survey #as also used as a chance
to meet people in the village and communicate the need for opening ank account
Murasu
1
announcement #ere made in the streets of the village to communicate the
gathering point for account opening formalities! )hese announcements are made
either in the evening or in the early morning #hen the people are availale in their
house
Banks have opened account opening centres at common places on Sunday #here
people gather at the aforesaid time #hich
helped the anks to do a ulk processing of
account opening
Bank Managers felt that the ank account
opening drive has gained momentum after making it mandatory for -RD+S jos! In
some anks$ the numer of -o.,rills account #ere calculated ased on the numer
of -RD+S jo cards issued in their service area
"s of no#$ funds of +overnment schemes are not credited directly into the
individual/s account! )hey are either paid in the form of cash or as a crossed che5ue!
People step into ank mainly for availing services like +old loan and for collection of
issued y +overnment schemes
Benefits that the anks enjoy after the ,inancial Inclusion drive$
Increase in customer ase and higher foot falls in the anks
2
Makkal -ala Paniyalargal are the panchayat functionaries
1
Is a type of Percussion instrument
!akkal Nala %aniyalargal have played
a vital role in coordinating the efforts
of bringing people to the banks for
account opening and assisting them in
documentation clarifications
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Increase in the floating deposit ase
Iariety in the portfolio of the ank/s credit
+reater utilisation of the +old :oan facility
Private ank/s participation in the ,inancial Inclusion is found to e very less
Banks have not taken any initiative to impart financial literacy! )hey help out the
people #ho enter the ank y assisting them in filling up the forms and guiding them
to the right place
General :3servations
Most of the people felt that the ank account is opened only for the -RD+S purpose
and they do not associate saving hait #ith the ank! )his is mainly ecause of the
fear that small amount cannot e saved in ank and also they cannot afford to spend
a day/s #ork for depositing the money
Dducation on long term financial planning is very much re5uired for the people
Short term financial needs are generally met y the money that they keep safe in the
house
)he farmer respondents e'pressed that they have opened a ank account for
availing agriculture loan
+enerally traders have a very small #orking capital and they #ork on rotation of
money and they are found to e having a good savings hait primarily through
nearest post office
Insurance is perceived to e a comfortale saving medium as they #ere persuaded
y their relative or friend #ho #orks as an insurance agent to start a policy! )he
insurance agent comes to the door.step to collect the premium amount!
)he financial Inclusion drive has gained momentum in this district after the ank
account opening #as made mandatory for the -RD+S eneficiaries! )he village
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
panchayat has taken the initiative to coordinate the account opening process for the
villages!
!akkal Nala %aniyalargal collects the re5uired details$ photographs from all the
individuals #ho have the -RD+S jo card and sumits the filled in application forms
to the ank! 8nce the account opening procedure is completed$ the Bank Managers
give the account numers to them$ #hich is then informed to the individuals
In some villages$ Bank Pass ooks are not distriuted to the individuals through the
Makkal -ala Paniyalargal ut they are issued to the Individual itself #hen they step
into the ank for any transaction
o Bank Managers feel that if the person steps into the ank for collecting the
pass ook it #ould e a chance of ac5uaintance and moreover they feel that
it is not #orth giving the passook to a person #ho #ould not use the ank
account
o 8n the other hand$ the account openers feel that they may have to forgo a
day/s #ork if they go to the ank for just collecting the passook! So they
keep postponing this #ork until they have a -DD& to use the ank account
In some villages even after the anks have issued the pass ooks in ulk$ they
haven/t reached the respective account holders! )hey #ere collected and kept in the
Panchayat office! It #as informed that they #ould e issued to the respective
account holders #hen they have a need to use the pass ook
!akkal Nala %aniyalargal have een greatly helping the ank ranches in gathering
and coordinating the people for account opening ut their remuneration is too lo#
compared to the volume of #ork performed y them! Increasing the
remunerationFincentives to these #orkers #ill help in increasing the pace of financial
inclusion!
@ages are disursed on a #eekly asis and the amount of #ages to e paid to each
eneficiary is calculated on the numer of days heFshe #as present for the #ork!
)he technical and 5ualitative aspects of the #ork are inspected and the
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
compensation is decided accordingly$ #hich is then divided among the numer of
persons #ho have een present for the #ork!
@eekly #ages funds are released to the +ram Panchayat y #ay of che5ue #hich
the +ram Panchayat gets credited into its ank account specifically opened for the
purpose of -RD+S! )he amount is #ithdra#n from this account and the actual #ages
is disursed in cash to the eneficiaries!
)hough -RD+S has a provision to credit the #ages directly into the eneficiary/s
accounts$ it is not follo#ed yet
"s of no#$ the ank accounts are opened ecause the #eekly #ages has to e
credited into the account of the eneficiary if heFshe is not availale on the day of
salary! But this method is not practised yet!
In some villages it #as oserved that people get Rs! 62 as a daily #age under -RD+S!
)he reason for this #age cut is that the #ork has not een performed to the )"R+D)
:IMI)! )he actual #age a person has to get is Rs! 70 per day
Infrastructure and the man po#er re5uirements are the major challenges from the
ank/s side if the -RD+S #age is directly credited into the individual/s account
" large section of people have a perception that the government is issuing them
ank pass ooks free of cost and if they get an account no# they need not run for
opening an account #hen they receive any che5ues from government schemes or
insurance! Savings doesn/t seem to the primary ojective of opening an account!
In Indian 8verseas Bank$ "ppantirupathi it #as oserved that je#el loan #as not
provided to the -o.,rills account holders ecause the system does not allo#
entering a loan transaction for a -o.frills account
In some cases it is seen that the -o.frills account pass ook is lank #ith no
transactions! But the same person has done a considerale amount of savings in the
S(+ account! )hey use their -o.,rills account for availing loan or for passing che5ues
ut they don/t have any individual savings as such
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Ieeraperumalpuram is a village located 02 kms from
the nearest ank ranch B %anara Bank$ 9alligudi! ,or
any transaction$ a person has to travel y t#o uses to
reach the ank! In this village people have a healthy
savings hait through the Post office #hich is located
#ithin the village! People in this village can enefit a
lot if the ank comes to the door steps of the people
"s of no#$ Business %orrespondence has not een used
in any ank ranches! )here is a huge savings potential
#hich could e tapped if the ank/s services are made availale in the door steps of
the customers
Banks have not e'tended the 8verdraft facility to the -o.,rills account and the
people are not even a#are of such a facility
" communication letter #as sent from SBI to the Individual households informing
their account numer and other details! Dntire
communication is done in Dnglish language
;Refer picture<! )his type of first correspondence
from the ank mentally alienates the customer
from the ank
Money :enders play a major role in catering to the finance needs of the rural people
y providing them the financial assistance at the times of emergency$ at their
doorsteps #ith no collateral or guarantor ut charging a high interest rate!
)he Money lending usiness typically #orks like B #hen there is a need for Rs!
00$000$ the Money :ender enters the orro#ed amount in his ooks ut gives only
Rs! 7$300 in hand! ,rom the ne't day$ the orro#er has to pay Rs! 000 per day for
000 days to repay the det! )his type of loan is generally given for productive
activities like running a petty shop or for fulfilling the last fe# days cash re5uirement
for "griculture
I am doing small savings in
my house which is generally
spent for repaying the Money
Lenders
A quote by a villager
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
)his e'ample e'emplifies the potential of a person to give Rs! 000 to a Money lender
and these people pay them promptly #ith the fear that the unpaid interest #ould e
added to the principal amount in case of default
Banks have the provision to issue deit cards for the -o.,rill account holders ut the
ankers feel that the deit card could also e used as a property to e mortgaged as
it is een follo#ed #ith the old age pension pass ooks!
#hapter ?2 Business #orrespondent Model
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
"fter the study in the Madurai &istrict$ a one.day visit #as made to -anmangalam village
located in %hennai #here Business %orrespondent Model #as implemented and is e'ecuted
successfully!
>ma Mahes#ari #orks as the Business %orrespondent ;B%< in this village and she started
operating from ,eruary 2006! She #as identified through the (ead Master of the school
located in the village after #hich a short training #as given on operating the Dlectronic &ata
%apture Machine! She #as also given training in asic accounts ook handling #hich she
already had e'perience y handling fe# S(+s!
:perations of a Business #orrespondent
0! )he B%/s first task is #as to campaign the need for opening a ank account and
e'plain the people aout the ease and convenience of operating a ank account
through the machine from their door steps
2! )he necessary details of the applicants are captured along #ith their photograph and
fingerprint #ith the help of the ,I-8 operatives
1! )he collected data is transferred to the ank/s %ore Banking System for the purpose
of opening -o.,rills account! "t the same time the data re5uired for preparation of
smart cards is used y ,I-8
2! Smart cards are issued to the account holders through the B%! " Master card is also
issued to each B%F%SP
2
#ho acts as an agent to the ank offering the anking
services to the account holders
3! Dach day$ B% has to Gsign.in/ using the land.line phone conncetion to the ank/s
dataase$ in order to e ale to carry out anking transactions during the day$ the B%
has to Gsign.off/
4! )he B% starts at 2pm daily and she reaches all the households in her village #ith the
,I-8 machine and cash that may e re5uired for a day/s transaction
2
&ustomer 'ervice %oint
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
6! In order to depositF#ithdra# cash$ the account holder has to present the smart card
to the B% #hich is scanned in the machine
7! )he smart card is inserted into the slot availale and the identity is verified using the
finger print scanning device! )he machine allo#s the transaction only after the
authentication of the finger print stored in the card
9! 8nce the authentication is successful$ the account holder is allo#ed to deposit or
#ithdra# cash to the stipulated limit
00! )he B% enters the amount of cash to e deposited or #ithdra#al$ this is confirmed
y the account holder once again through finger print authentication
00! It #as oserved that some people deposit amount as lo# as Rs! 3 into the account
#hich is #ithdra#n after a period of 1 months and paid for insurance ;Premium of
Rs! 230<
02! )he transaction details are immediately printed from the printing device$ in
duplicate$ and one copy is handed over to the account holder #hile the other is
retained y the B%! )he account alance in the smart card is also updated
immediately
01! )he machine also has an to option print a mini.statement of last 00 transactions
performed and to update the pass ook$ it has to e presented to the ank ranch
"ictorial !epresentation
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
In order to have a etter understanding of the B% model and functioning$ it is pictorially
represented elo#$
Pic1: Smart card that stores the account information and Finger print details
Pic: FI!" #achine and the smart card inserted into the slot
Pic$: Sign Board that is placed in front of the residence of the B%
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Pic&: B% reaches all the households in the village
Pic': Initial authenticated of the (ccount holder by inserting the card and finger print
authentication
Pic): (mount to be deposited
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Pic*: Finger print authentication for deposit
Pic+: ,eposit Slip -eneration
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Pic.: %opy of ,eposit /eceipt given to the account holder
#hapter 72 !ecommendations @ #onclusion
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
!ecommendations for improvement
,ollo#ing recommendations may e made in order to see further improvements in the
e'ecution of the ,inancial Inclusion project
It #as oserved that there is lot of potential for implementing the Business
%orrespondent as there is lot of #illingness sho#n y the people to save!
Implementation of this model enefits the account holders as #ell as the ankers to
a greater e'tent
In order to purchase the Dlectronic &ata %apture Machine$ Smart cards all the anks
in the district can place a ulk order to a vendor! )his can help the anks to reduce
the cost of purchase and to negotiate terms and services #ith the vendor
Special "#areness and outreach activities should e conducted to ensure that all
concerned laourers$ including #omen are educated on the various aspects of
personal finance planning and aout using the ank account!
"s soon as the account is opened$ passooks have to e issued to the account
holders! In some cases it #as oserved that either passooks #ere not issued or the
issued passooks did not reach the eneficiaries
Many account holders #ere not even a#are of the purpose of opening the ank
account and having passook! )hey #ere under the impression that holding a ank
passook might entail them to have some assistance through +overnment schemes
or result in getting loans in the later stage! Banks have to take necessary action on
this perception y constantly reaching out to the villages and stress upon the need
for saving
"ny letter communication from the anks should e addressed in the local language
or the language of their preference
Routing the +overnment Scheme funds is one of the efficient #ays to control the
leakage of funds through intermediaries as the funds reach the eneficiaries directly!
But efore implementing the direct crediting of money into the eneficiaries/
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
accounts it is very important to make sure everyody in the district possess ank
account
"s majority of the population feel that anks are located far from their residence$ it
is very important to take the anking services to their doorsteps! It has to e clearly
understood that this is a MPush MarketN and the anks have to reach out to them to
initiali=e the anking haits in them
)hough the present active account users are very lo#$ they can e effectively used to
propaganda the need for saving! MW-+9 -> M-;8*N #ill e an effective medium to
communicate this message
Banks have to #ork in the convenient hours for laourers as most of them go to
#ork early in the morning and come ack at around 4pm! Banks have to allocate a
specific time in the evening especially to meet the needs of the laourers
Banks should leverage technology to the ma'imum to induce the ne# account
holders to use and transact the accounts more and save more
Best practises follo#ed y a ank for some specific prolem has to e documented
and shared among other anks #ithin the district on a periodic asis
D'ternal "gencies may e employed to make a post implementation survey in the
region and the feedack on the situation at the ground level may e shared
&istrict "dministration and :ead Bank has to take necessary steps to conduct
#orkshops to sensitise the anks$ -+8s$ B%FB,s and other parties involved on the
need for effective utilisation of ank accounts
Bank Branches have to e financially helped in upgrading the infrastructure
re5uirements and to meet the man po#er shortage! )he anks that are performing
etter in ,inancial Inclusion may e incentivised through infrastructure support from
RBI
Bankers have to make a field visit to their service area to have a etter
understanding of the customer/s needs! )his also enales the Bankers to sensitise
the financial situation of the people
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Implementation Model
,ollo#ing is the proposed 9.stage implementation model for the ,inancial Inclusion project$
"fter studying the current implementation strategy of the ,inancial Inclusion project$ a
modified model is recommended!
Stage( A Bousehold SurveyA Based on the village profile particulars$ the individual ank
ranches have to form teams of ank officials and S(+s! )he team has to e formed in the
village level so that each village in the lock assemles its o#n team! )he team shall visit the
individual householdsC fill the survey form that contains particulars of the households and
their #illingness in opening account! )he particulars also should contain details of e'isting
account holders of the household!
Stage% A Generating "u3lic A/arenessC"u3licity for account opening2 In order to
promote this ,inancial Inclusion Project$ Banks can plan to conduct special camps and
advertise using &oor to &oor %ampaign$ Murasu$ ne#spapers and local channels! )I ads
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
could e an effective medium of communicating as the State +overnment of )amilnadu has
issued colour television to all households at free of cost! Small e'hiits of %omics in the
@eekly Market can also e an effective channel of communication!
Stage) A 5o;Frills account openingA ,or the #illing people$ accounts are to e opened in
the household itself$ y taking photograph and filling the account opening form! In order to
make the account opening process easier$ the anks has to conduct account opening camps
y gathering people of the village in a common place! Simplified 9E% norms shall e
follo#ed! )he photograph charges shall e ared y the ank itself! "lso as a token of
having accepted the opening of the account$ the officials have to issue an ackno#ledgement
slip! "ccount opening camps shall e conducted on #eekends so that it is easier for the
people to assemle for the session! Bank employees from other locks$ -+8s$ S(+
volunteers can e trained and used to assist the documentation process!
Stage. A Financial 9iteracy sessionA )he success of ,inancial Inclusion does not ends
#ith opening a -o.,rills account$ it can reach its full momentum only if there is a constant
connect et#een the ank and the customers in the initial stages of account opening!
,inancial :iteracy programmes can e conducted at a pulic gathering and it has to cover
the asic aspects of ank account like credit$ deit$ interest rate etc!$ in a dramatic manner!
%omic posters and ooks in the local language could e used! RBI shall pitch in at this stage
and drive through the process!
Stage& A Follo/;up campsA ,ollo#.up camps are to e conducted for t#o purposed! ,irst
reason is to have a constant connection #ith the customers! Second reason is to follo#.up
on the ank passook issue and resolving other discrepancies in the process! )he ojective
of a follo#.up camp is to make sure everyody is supplied #ith the ank passooks!
Stage- A Sanction of :verdraft @ G##CD##A Based on the household re5uirements and
eligiility 8ds$ +%%s and 9%%s shall e provided to them! >sually during initial stages 8ver
&raft of Rs!300 is given and on successful repayment of it$ the amount is increased up to
ma'imum of Rs!3000! )his #ill e a great opportunity to grocery shop o#ners and small
traders #ho #ork out of a small #orking capital and invest the money in productive
activities!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Stage? A "eer !evie/A "fter the implementation of the project$ a report shall e prepared
y the respective Bank Branches on the status of the ,inancial Inclusion project in their
service area! "fter this$ a peer revie# committee shall e constituted for each loc
comprising of a anker$ -+8 memer and a panchayat official! )his team #ould survey
villages in another lock randomly and collect details regarding the reach of the ,inancial
Inclusion$ issue of passooks$ sanction of 8&$ +%%F9%%$ local prolems of account usage
pertaining to that lock and shall sumit the report to the :&M! " similar team from another
lock shall do the same survey cyclically! Peer revie# #ill help the System in the follo#ing
#ays$
+ives a third party perspective of the system
Dnales kno#ledge sharing et#een the locks and sharing of est practises
that may e follo#ed in different locks for a particular issue
Dffective scrutiny of the system
Stage7 A !outing Government scheme fundsA ,inancial Inclusion drive can e paced up
y disursing the +overnment Benefit payment directly into the eneficiaries account! )his
not only provides a distinct advantage to the +overnments in ensuring accurate and timely
payments to the eneficiaries ut also minimi=es the instances of leakages$ frauds and role
of intermediaries!
StageE A "eriodic monitoring of the ImplementationA "ny reform initiative can e
successful only if it is fle'ile enough to accommodate changes for the etterment of the
system! )he -o.,rills account functioning should e constantly monitored and necessary
assistance shall e given to the customers$ Banks and also to other parties that are involved
in the system!
#onclusion
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
()conomic viability and 'ocial acceptability are the to pillars for the sustainability of a
system*
)he #illingness sho#n y nearly 94H of the respondents to save e'hiits the fact that there
is a lot of untapped market potential in the rural market for anking! )his can e termed as
M8pportunity in the Bottom of the PyramidN! Many Bank Managers feel that ,inancial
Inclusion is a social responsiility cast on them to help poor ut they must understand the
fact that the anking services need to e MmarketedN to connect #ith large population
segments! It is a #in.#in situation for the ankers and the account holders! &istrict
administration should enale an environment conducive for the e'ecution of the project via
roads and digital connectivity! Dstalishing %redit counselling centres and financial literacy
cells is the need of the hour as majority of the people find no other means of getting credit
and get trapped #ith the Money :enders!
)o sum up$ e'ecution of ,inancial Inclusion does not end #ith opening -o.,rills accounts! It
can e considered successful only if they start utilising the anking services! It is a
collaorative effort that must e taken y all the stake holders like Bankers$ &istrict
"dministration$ -+8s and others! Banks have to redesign their usiness strategies to
incorporate specific plans specific plans to promote ,inancial Inclusion of lo# income group
treating it oth a usiness opportunity and social responsiility!
Anne1ure;I2 Fuestionnaire for common man
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
No- Frills account holders - Questionnaire
&istrict Madurai Iillage Bank
Branch
0< -ame of the respondentA OOOOOOOOOOOOOOOOOOOOOOOOOOOOOO "ge A OOOOOOOOO
2< +ender A MaleF,emale
1< Dducation :evel
a< Belo# 3th Std! < Belo# 02th c< +raduate K "ove
d< )echnical Studies e< -o Dducation
2< 8ccupation
a< ,armer < Self Dmployed c< Pulic FPrivate Sector
d< "gricultural :aour e< )rader f< -on B"gricultural laour
g< >nemployed h< (ose #ife i< 8thers$ SpecifyAOOOOOOOOOOOO
3< Monthly income ;Rs!< A a< P0300 < 0300 B 1000 c< 1000 B 3000 d< Q3000
4< )otal -umer of "dult memers OOOOOOOOO of #hich having OOOOOOOOO ank account
6< @hen #as your Bank account openedR OOOOOOOOOOOOOOOOOO
7< &istance of the ank from your residenceA
a< P0 9m < 0.1 9ms c< 1.3 9ms d< Q3 9ms
9< (o# many transactions #ere made after opening your accountR
a< Lero < 0 to 1 c< 2 to 00 d< Q00
00< If you are not using Bank account$ #hat is the reasonR
a< :ack of a#areness of anking services < Banks located far a#ay
c< Banks not functioning in the convenient time d< %omple' process involved transactions
e< ,eeling that small amount cannot e saved in anks f< Banks officials not polite to guide us
g< 8thes$ Specify OOOOOOOOOO
00< @hat is the reason for opening M-o.,rills "ccountNR
a< ,or doing savings < ,or availing loans
c< Receiving payments from +ovt schemes d< %ompulsion y ank officials
e< )o deposit %he5uesF&& f< Bank account #as offered at my
doorsteps
e< 8thers$ SpecifyOOOOOOOOO
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
02< &o you have a regular savings hait A EesF-o
(Questions 13, 14 & 15 to be answered only if the participant has a saings habit!
01< @hat is the purpose of savingsR
a< Dducation of children < Small )rade F Petty Shop c< Purchasing a house
d< Social functions e< %onsumption needs f< others$ Specify OOOOOOOOOO
02< @hat is your most preferale source of savingR
a< 9eeping safe in home < S(+ c< Bank
d< Post 8ffice e< %hit funds f< %o.operative Societies
f< 8thers$ SpecifyOOOOOOOOOOOO
03< @hat is the reason for choosing the channel for saving other than anksR
a< Dase K %onvenience of transaction < (igh Interest rate
c< &oor Step availaility d< :ack of "#areness of other means
e< "vailale at the time of emergency f< 8thers$ Specify OOOOOOOOOOOOOOOO
04< In case of a need$ from #here do you usually orro#R
a< Bank < %ooperative Societies c< S(+
d< Money :enders e< ,riendsF RelativesFPa#n Brokers f< 8thers$ Specify OOOOOOOOOO
("f the answer for aboe #uestion is (d! or (e! then answer Q$ 1% & 1&!
06< @hat is the reason for orro#ing from the aove sourceR
a< :ocated neary < :esser proceduresFdocumentation
c< %ash availale at emergency d< :ack of credit from other means
e< "ny time access of cash f< 8thers$ Specify OOOOOOOOOO
07< (as any of your property een mortgaged #ith money lendersR EesF-o
09< "re you a#are of the 8&$ +%% facility in your M-o.,rills accountNR EesF-oF-o idea
20< If yes$ have you utilised the 8verdraft facility in your ankR EesF-o
20< @hat is the reason for not using the 8verdraft facilityR
a< -o financial need < Poor response from anks officials
c< ,ear of more interest d< ,ear of hidden charges
22< &o you have any investments in goldFhouseF vehicleR EesF-o
21< @hat are various facilities that you #ould e re5uiring from the ank for effective usage of the ank servicesR
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Anne1ure;II2 Fuestionnaire for Bank Branches
Bank Branches - Questionnaire
-ame of the Bank :ocation
"rea of 8peration -o of villagesFBlocks
0! &etails on ,inancial InclusionA
S! -o Particulars &etails
0 -umer of households in the area
2
-umer of households covered
1
-o! 8f -o.,rills account opened
2 -o! 8f operative accounts
3
-o! 8f non operative accounts
2! (as any survey een conducted to measure the reach of ,inancial Inclusion InitiativeR EesF-o
1! @hat are the offers made to open an accountR
2! @hat are the various channels used for creating a#areness and pulicity among peopleR "lso$ Rank the various
channels used for pulicity! ;0 eing the most effective channel<
a< -e#s paper ads ; < < )elevision "ds ; < c< Radio "ds ; <
d< &oor to door campaign ; < e< Banners ; < d< 8thers$ Specify
3! (ave you used Business %orrespondentFBusiness ,acilitatorR ;EesF-o< If -o$ @hat is the reason for not
usingR
("f '() for preious #uestion, answer Q$*!
4! @hat are the profiles of people used as Business %orrespondents and ,acilitatorsR
6! (ave you rela'ed the 9E% norms for -o.,rills accountsR EesF-o
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
7! (o# many accounts are getting the funds through government schemes like -RD+" etcR "nd #hat is the usage
pattern of those accountsR ;,re5uency of usage$ deposit etc<
9! (ave you follo#ed any promotional strategy for ensuring the continuous usage of M-o.,rills "ccountNR
00! (ave you provided any micro credit facility for any account holdersR ;EesF-o<! If yes$ #hat are the various
schemes of micro finance providedR
00! &o you have any programmeFinitiatives for the financial literacy of the account holdersR
02! @hat are the enefits otained y the ank after opening -o.,rills accountR
01! @hat are the difficulties faced y you in making the account holders use the anking servicesR
02! @hat are the various measures taken y you to overcome the difficultiesR
03! @hat are the support #ould you re5uire from RBI for the effective functioning of the -o.,rills accountR
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
Anne1ure;III2 5e/s article
Important findings of the study #ere presented at the &istrict :evel Bankers Revie#
%ommittee Meeting held in Madurai on 23th of ?uly 2009$ #hich #as pulished in the daily
ne#spaper M)he (induN!
S
u
m
m
e
r

P
l
a
c
e
m
e
n
t

P
r
o
g
r
a
m
m
e

2
0
0
9
!eferences
0! Report on %urrency and ,inance$ 2004.2007
2! Speech y Smt! >sha )horat$ &eputy +overnor of the Reserve Bank of India at the 2
th
Programme on (uman &evelopment and State ,inances jointly organised y %ollege
of "gricultural Banking$ Reserve Bank of India$ >-&P and the Planning %ommission$
at %"B$ Pune on ?anuary 04$ 2004
1! "rticle y Shri! I! :DD:"&("R$ $ &eputy +overnor of the Reserve Bank of India in
Reserve Bank of India Bulletin$ ?anuary 2004 edition on the topic of M)aking Banking
Services to the %ommon Man .,inancial InclusionSN
2! Speech delivered y Smt! >sha )horat$ &eputy +overnor$ Reserve Bank of India at
the (M).&,I& ,inancial Inclusion %onference 2006 on ?une 09$ 2006 at @hitehall
Place$ :ondon$ >9

Financial Inclusion PDF

Uploaded by

Copyright:

Available Formats

Financial Inclusion PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Inclusion PDF

Uploaded by

Copyright:

Available Formats

SUMMER PROJECT REPORT

You might also like