Summer Training Report On Financial inclusion a must for growth of Indian economy

Submitted in Partial Fulfilment of the Requirement of the Masters of Business Economics Degree Under Submitted by the guidance Ahmed ,FID of Nadeem department,

Mr. Bashir Harvinder Pal Singh Incharge MBE(2010-11) JK bank CHQ Srinagar

Punjab School of Economics GURU NANAK DEV UNIVERSITY Amritsar

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RESEARCH METHODOLOGY and OBJECTIVES

Secondary research: reports, websites, Newspapers & Journals Primary research : Telephonic & Personal Interviews.

Primary Objective: To understand the concept of financial inclusion To study the need for financial inclusion To study the role of RBI as a governing agency To study the barriers and opportunities related to it To study the role of Jammu and Kashmir bank in implementation of FI plans in valley.

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- http://www.docx-to-doc-converter.com It is a pleasure to record my thanks and gratitude to persons and organizations whose generou s help and support enabled me to complete this project within the stipulated time period. My s pecial thanks are due to Mr. Bashir Ahmed Nadeem ( Incharge financial inclusion departm ent JK BANK CHQ Srinagar), for his active help and support in making me understand the c oncept of financial inclusion. I also thank other thank Mr. Shah Hussain (Associate Executi ve S&B department) for providing me relevant material and data and their help and cooperati on at each stage. I also thank Javed Ahmed Mir and Agah Abdul Hassan (banking correspo ndent/village level entrepreneur) for providing the knowledge about the actual working of a kidmat centre/common service centre. I am greatly indebted to all those persons who have helped me in some way or other in the co mpletion of the project. The faculty of my institute deserves the praise for their role in shaping this summer training p roject

However, I take the responsibility of all my shortcomings.

Harvinder Pal Singh

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TABLE OF CONTENTS
1. Introduction Need for financial inclusion 2. Financial inclusion meaning: Financial products and services Factors affecting access to financial services Benefits of inclusive financial growth Relationship between FI and development indicators Expectation of poor from financial system 3. Financial exclusion Causes of financial exclusion Demand side barrier Supply side barrier 4. 5. Consequences of financial exclusion Financial inclusion in India RBI and financial inclusion Nationalisation as the first step towards financial inclusi on The priority sector approach Lead bank scheme No frills account KYC norms SHG models Rangarajan committee

6.

Jammu and Kashmir bank profile

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- http://www.docx-to-doc-converter.com Revised FI policy framed by bank Objectives Banker correspondent Assumption for cost estimates

7.

Technology and financial inclusion

FINO the technology service provider Technology solution A glimpse of Kidmat centre (common service centre) 8. 9. 10. 11. 12. Area visited Recommendations Conclusion Bibliography Glossary

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.........INDIA MUST MAKE BOLD DECISIONS TO COMPLETE THE FINANCI AL INCLUSION PLAN AT THE QUICKEST POSSIBLE TIME AND FOLLOW UP WITH A MORE AMBITIOUS PLAN FOR ECONOMIC INCLUSION TO U PLIFT THE POOR........., writes M. Narendra.
The process of economic growth, especially when it is on high growth trajectory, must strive to encompass participation from all sections of society. Lack of access to finance for small/m arginal farmers and weaker sections of society has been recognized as a serious threat to econ omic progress especially in developing countries. Moreover, prolonged and persistent depriva tion of banking services to a large segment of the population leads to a decline in investment and has the potential to fuel social tensions causing exclusion. The Indian Economy was in a crisis in 1991. Foreign exchange reserves dipped to an all time low by June 1991, inflation peaked at 16.7 per cent in August 1991 and GDP growth dropped sharply to 1 per cent. In order to overcome this crisis, substantial reforms were undertaken w hich resulted in a shift in the development paradigm of the country. The New Economic Polic y (NEP), launched during this time had two broad elements (i) stabilisation and (ii) Structural Adjustment Policy (SAP). While the stabilisation policies were short / medium term designed to deal with inflation and balance of payments deficits, the SAP aimed to enhance the econo my's productivity in the long run and set it on a higher growth path. An important outcome of the NEP was deregulation of the financial sector in order to facilitate the development of the capital and money markets. Financial inclusion is a global agenda to make a decisive attack on global poverty and exclusi on. There were similar global efforts in the past such as the new International Economic order or the north south dialogue which failed to take off perhaps because they attempted to treat th e symptoms more than the disease. Gandhiji said it was wiser to teach a poor man to fish than to feed him fish. That is the strategic philosophy behind financial inclusion. Better than offeri ng alms and doles to reduce poverty, it was wiser to offer the poor finance to rebuild his or he r life. Globally the assumption is fast gaining grounds that domestic financial markets are the best drivers of growth and poverty reduction. Financial inclusion today is as relevant in developed as much as in developing ones. Take the case of U.K. which has the most matured financial market in the world. The government is ta rgeting to bring inclusion to an estimated eight million people there who are still untouched b y the financial markets. Even in the U.S. more than 30 million are estimated to be insolvent a nd at the mercy of unorganised loan shark and debt collectors.

The World Bank estimates that more 2.5 billion people were living below the international po verty line of $2 a day in 2005. For a poor finding a way out of poverty is limited by their inab ility to borrow or save money. It is estimated that only about 150 million poor people have ac

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- http://www.docx-to-doc-converter.com cess to collateral-free loans. Financial inclusion is considered vital to poverty reduction and achievement of the Millenniu m development goals. By borrowing, saving, and buying insurance the poor can plan for their future beyond the short term. They can built up assets and invest in education and health. Fin ancial services can help the poor cope in times of need and hardships. Beyond these tangible i mpacts, access to financial services promote social inclusion and builds self confidence, emp owerment. The UN has defined the goals of FI as follows. (1). Access at reasonable cost foe all the households to a full range of financial services, inclu ding savings and deposits services, payement and transfer services, credit and insurance. (2). Sound and safe institutions governed by a clear regulation and industry performance stan dards. (3). Financial and institutional sustainability to ensure continuity and certainty of investment. (4). Competition to ensure choice and affordability for clients.

NEED FOR FINANCIAL INCLUSION

It is now widely acknowledged that financial exclusion leads to non- accessibility, non-afford

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- http://www.docx-to-doc-converter.com ability and non-availability of financial products. Limited access to funds in an underdevelop ed financial system restricts the availability of their own funds to individuals and also leads to high cost credit from informal sources such as moneylenders. Due to lack of access to a bank account and remittance facilities, the individual pays higher charges for basic financial transa ctions. Absence of bank account also leads to security threat and loss of interest by holding ca sh. All these impose real costs on individuals. Prolonged and persistent deprivation of bankin g services to a large segment of the population leads to a decline in investment and has the po tential to fuel social tensions causing social exclusion. Thus, financial inclusion is an explicit strategy for accelerated economic growth and is considered to be critical for achieving inclusi ve growth. The process of economic growth, especially when it is on high growth trajectory, must strive to encompass participation from all sections of society. Lack of access to finance for small/ m arginal farmers and weaker sections of the society has been recognized as a serious threat to e conomic progress especially in developing countries. Moreover, prolonged and persistent dep rivation of banking services to a large segment of the population leads to a decline in investm ent and has the potential to fuel social tensions causing social exclusion.

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Financial inclusion meaning

Sometimes, it is easier to define a phenomenon, by stating what it is not, i.e., define financial exclusion (rather than inclusion). A target group can be considered as financially excluded if t hey do not have access to mainstream formal financial services such as banking accounts, cre dit cards, insurance, remittances, payment services, etc. Financial inclusion is the delivery of financial services at affordable costs to sections of disad vantaged and low income segments of society. Unrestrained access to public goods and servic es is the sine qua non of an open and efficient society. It is argued that as banking services are in the nature of public good, it is essential that availability of banking and payment services t o the entire population without discrimination is the prime objective of public policy. The ter m "financial inclusion" has gained importance since the early 2000s, and is a result of finding s about financial exclusion and its direct correlation to poverty. Financial inclusion is now a c ommon objective for many central banks among the developing nations. Financial inclusion is the availability of banking services at an affordable cost to disadvantag ed and low-income groups. In India the basic concept of financial inclusion is having a saving or current account with any bank. In reality it includes loans, insurance services and much mo re.

Financial Inclusion Includes Accessing Of Financial Prod ucts and Services Like,

Savings facility Credit and debit cards access

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Electronic fund transfer All kinds of commercial loans Overdraft facility Cheque facility Payment and remittance services Low cost financial services Insurance (Medical insurance) Financial advice Pension for old age and investment schemes Access to financial markets Micro credit during emergency Entrepreneurial credit

Financially Excluded People The financially excluded sections larg ely comprise:

Marginal farmers Landless labourers Oral lessees Self employed and unorganised sector enterprises Urban slum dwellers Migrants Ethnic minorities and socially excluded groups Senior citizens Women The North East, Eastern and Central regions contain most of the financially excluded population.

Factors affecting access to financial services

Legal identity : Lack of legal identity like voter id , driving license , birth certificates , employment identity card etc

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Limited literacy: Particularly financial literacy and lack of basic education prevent p eople to have access from financial services . Level of income : Level of income decides to have financial access . Low income peo ple generally have the attitude of thinking that banks are only for rich. 'Terms and conditions : While getting loans or at the time of opening accounts banks places many conditions , so the uneducated and poor people find it very difficult to ac cess financial services . Complicated procedures : Due to lack of financial literacy and basic education , it is very difficult for those people who lack both to read terms and conditions and account filling forms . Psychological and cultural barriers : Many people voluntarily excluded themselves due to psychological barriers and they think that they are excluded from accessing fin ancial services . Place of living : As the name suggests that commercial banks operate only in commer cially profitable areas and they set up branches and main offices only in that areas .Pe ople who lived in under developed areas find it very difficult to go to areas in which b anks are generally reside . Lack of awareness : Finally , people who lack basic education do not know the impo rtance of the financial products like Insurance , Finance , Bank Accounts , cheque faci lity ,etc. Growth with equity : In the path of super power we the Indians will need to achieve the growth of our country with equality . It is provided by inclusive finance. Get rid of poverty : To remove poverty from the Indian context all everybody will be given access to formal financial services . Because if they borrow loans for business o r education or any other purpose they get the loan will pave way for their developmen t. Financial Transactions Made Easy : Inclusive finance will provide banking related financial transactions in an easy and speedy way . Safe savings along with financial services : People will have safe savings along with other allied services like insurance cover , entrepreneurial loans , payment and settlem ent facility etc, Inflating National Income : Boosting up business opportunities will definitely increa se GDP and which will be reflected in our national income growth . Becoming Global Player : Financial access will attract global market players to our c ountry that will result in increasing employment and business opportunities .

Benefits of Inclusive Financial Growth

Relationship between Financial Inclusion and Development Indic ators

Economic growth follows financial inclusion. In order to achieve the objective of gro wth with equity, it is imperative that infrastructure is developed with financial inclusi

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savings and credit accounts - indicators of financial inclusion. per capita income - indicator of economic development Electricity consumptionand road length -indicators of infrastructure development. All the above influence economic development which follows adequate financial and credit facilities

Expectations of poor people from financial system Taking into ac count their

Seasonal Inflow Of Income from agricultural operations, Migration from one place to another, Seasonal And Irregular Work Availability And Income; the existing financial system needs to be designed to suit their requirements. Security and safety of deposits Low transaction cost Convenient operating time Minimum paper work Frequent deposits Quick and easy access Product suitable to income and consumption

FINANCIAL EXCLUSION
Financial exclusion is the unavailability of banking services to people living in poverty. It is b elieved to be one factor preventing poor people from exiting poverty, by forcing them to man age their finances on a cash-only basis and restricting their access to equitable sources of credit. Financial exclusion is the process by which a certain sections of the population or a ce rtain group of individuals is denied the access to basic financial services. Financial exclusion

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- http://www.docx-to-doc-converter.com can make poor people vulnerable to loan sharks. Microfinance and is an approache used to re duce financial exclusion. Financial Exclusion is the phenomenon by which a certain section of the population or a certa in group of individuals is denied the access to basic financial services. The term came to pro minence in the early 1990's in Europe where the geographers found that a certain pockets or r egions of a particular country were poorer compared to regions which utilized more of financi al services.

CAUSES
n......

of fin

ancial exclusio

FINANCIAL EXC LUSION CAUSES

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Causes of financial exclusion.......

Financial Exclusion may also have resulted from a variety of structural factors such as unav ailability of products suiting their requirements, stringent documentation and collateral requ irements and increased competition in financial services. The Causes of financial exclusion can be identify broadly in two categories first demand side and the second supply side.

DEMAND SIDE BARRIER

The people who have the requirement\need but still not demanding\availing the financial se rvices\product which can due to the following reasons
1.

Low income A higher share of population below the poverty line result in lower demand for services as the poor may not have saving to place as d eposits in saving banks; hence the market lacks incentives in providing fin ancial services/products. Most the people belonging to financially exclude d group are having irregular/seasonal income. Hence opening of a bank acc ount and operating it i.e, deposits and withdrawal in very small denomina tion with that they also anticipated that bank refuses if they transact with s o small amount. Transaction cost: Vast number of rural population resides in small village s which are often located in remote areas devoid of financial services. Con sequently, the overall transaction cost to the customer in terms of both time and money proves to be a major deterrent for visiting financial institutions. The excluded sections of the society find informal sectors more reachable due to proximity and ease of transaction. Financial services being very complex in nature: excluded sections of th e society find dealing with organised financial sector cumbersome. Easy access to alternative credit: Some of the poor that do not have prop erty find it impossible to get credit without the collateral. The uneducated poor would rather put their trust in moneylenders who provide easy non-co

2.

3. 4.

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- http://www.docx-to-doc-converter.com llateral credit than on the well established commercial banks. There might also be cultural reasons for trusting a moneylender rather than a bank
5.

Low literacy rate: The lack of financial awareness about the benefits of th e banking and also illiteracy act as stumbling blocks to financial inclusion. The lack of financial awareness maybe the single most risk in financial incl usion. Legal identity: Lack of legal identities like identity cards, birth certificates or written records often exclude women, ethnic minorities, economic and p olitical refugees and migrant workers from accessing financial service. Sophisticated financial terminologies: bankers often use complex financi al terminologies, which the masses are unable to comprehend and hence do not approach for financial services voluntarily. Terms and conditions: Terms and conditions attached to products such m inimum balance requirement and conditions relating to the use of account a s in the case of saving bank account Psychological and cultural barrier: : The feeling that banks are not inter ested to look into their cause has led to self-exclusion for many of the low i ncome groups. However, cultural and religious barriers have also been obs erved in some of the countries. zero balance accounts) and procedural problems in accessing formal credit act as disincentives for consumers with weaker financial background.The b ank would rather give smaller number of large credits to middle and upper class individuals and institutions, due to the lower cost involved in banking with them. The banks and other financial service firms have fewer financia l products which are attractive to poor and the socially disadvantaged. All t hese act against the interest of a consumer from a poor family background.

6.

7.

8.

9.

10. Disincentive for the consumer: The cost of maintaining an account (non-

SUPPLY SIDE BARRIER....

Some of the important causes of relatively low extension of institutional credit in the rural a reas are risk perception, cost of its assessment and management, lack of rural infrastructure, and vast geographical spread of the rural areas with more than half a million villages, some sparsely populated.
a.

Perception among banks about rural population: Generally, there exi sts a perception among banks that large number of rural population is unbankable as their capacity to save is limited. Therefore they do not look f avourably at small loans often required by marginalised section. Such a lo ans are considered to be non-productive. Miniscule margin in handling small transaction: As the majority of ru ral population resides in small villages that too in remote areas, banks fin d small transactions cost ineffective. KYC requirements: The KYC requirements of independent documenta ry proof of identity and address can be a very important barrier in having a bank account especially for migrants and slum dwellers.

b.

c.

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d.

Unsuitable products: One of the most important reasons for the majority of rural population not approaching the formal sector for financial service s is the unsuitability of products and services being offered to them. For e xample, most of their credit needs are in form of small lump sums and ba nks are reluctant to give small amounts of loan at frequent intervals. Cons equently, they have to resort to borrowings money from moneylenders at uxorious rates. Staff attitude: As public sector banks(PSBs) cater to more than 70% of b anked population and about 90% of rural banked population, a majority o f staffs in these PSBs remain insensitive to needs of customers and shirk a way from duty. The situation is even worst in rural branches where they b ehave with rural poor in a condescending manner. Poor market linkage: It is often argued that we may have been growin g second fastest in the world, but still our 40-55% of people living in rura l and semi-urban areas do not have access to basic necessities of life. 75% of villages in rural areas have no electricity arrangement, so it can be ima gined that how much penetration market would be having especially whe n it comes to providing financial services/products, this may be that they are reluctant or there is no institutional as well as physical. Therefore ther e is no institutional infrastructural available in the rural area.

e.

f.

Poor market linkage or say penetration of services providers also constitute the major factor s of financial exclusion.
g.

Lack of interest from commercial banks: There is a lot of criticism on t he commercial banks because of their inherent tendency to think that poor people are not worthy of being banked on. Banks are in business to make profit and would like to only indulge in activities that give them profit. D ue to high costs on smaller transaction and the speculated high risk in len ding credit to the lower strata of the society, they see banking with poor a s unviable. Even if banks are concerned at the poor, they do it in a manne r of corporate social responsibility or social service and treat them differe ntly instead of trying to bring them into the mainstream. Unless banks an y incentive in banking with the weaker sections of the society, they would not be willing to do so. Poor credit control: Areas with poor credit record, bad past experience, socially unstable and poor recovery of previous loan/credit given are obse rved to be highly financially excluded, as the part of their risk manageme nt strategy.

h.

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Consequences Of Financial Exclusio n:

There are three dimensions of consequences that financial inclusion has on the people affecte d. Firstly financial exclusion can generate financial consequences by effecting directly or indire ctly the way in which the individuals can raise, allocate and use their monetary resources. Secondly a wider dimension of financial exclusion can be identified as socio-economic conse quences i.e, groups which are socially excluded are also found financially excluded. These consequences are affecting individuals' patterns of consumption, the way they participa te to economic activities or access to social welfare and the distribution of incomes and wealt h. They impact the way in which people behave both in terms of purchase decisions and the way in which they choose to spend their time, as well as their overall quality of life. Finally, a last dimension can be identified as the social consequences generated by financial e xclusion. These are the consequences affecting the various links that are binding the individu als: link to corresponding to self esteem, links binding to the society and links binding to com munity and/or relationships with other individuals or groups. At the wider level of the society and the nation, financial exclusion leads to social exclusion, poverty as well as all the other associated economic and social problems. Thus, financial excl usion is often a symptom as well as a cause of poverty. Financial exclusion is not evenly distr ibuted throughout society; it is concentrated among the most disadvantaged groups and comm unities and, as a result, contributes to much wider problem of social exclusion. A significant portion of demand for credit by rural households arises in order to ease the finan cial burden of crop failures, illness or death, and health care. In the case of microenterprises, credit may be needed to achieve a reasonable and viable scale of activities. The rising entrepr eneurship spanning rural, semi-urban and urban areas, particularly in the unorganized and inf ormal sectors may give rise to large potential demand for credit. Another cost of financial exclusion is the loss of business opportunity for banks, particularly i n the medium-term. Banks often avoid extending their services to lower income groups becau se of initial cost of expanding the coverage may sometimes exceed the revenue generated fro m such operations. These business related concerns of banks were, however, meaningful whe n technology development was at a nascent stage and expanding the coverage of financial ser vices required substantial initial investment. The strides in technology have now reduced the r

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- http://www.docx-to-doc-converter.com equired initial investment in a significant manner. What is required is to explore the appropria te technology which is suitable to socio economic conditions of the region under consideratio n. Moreover, availability and usage of the financial services by the otherwise excluded popul ation groups would lead to increase in their income level and savings. This, in turn would hav e the potential to increase savings deposits as well as credit demand, implying profitable busi ness for banks in the medium term. Two Major Threats

Losing opportunities to grow : In the absence of finance , people who are not conne cted with formal financial system lack opportunities to grow. Country's growth will retard : Due to vast unutilized resources that is in the form of money in the hands of people who lack financial inclusive services. Business loss to banks: Banks will loss business if this condition persists for ever du e to lack of opening of bank accounts. Exclusion from mainstream society: The people who lacks financial services , presu med that they are excluded from mainstream society . All transactions cannot be made in cash: Some transactions can be made in cash . I n this technological world everybody wants to have electronic cash system like debit a nd credit cards and also EFT . Loss of opportunities to thrift and borrow: Financially excluded people , may lose chances to save their some part of livelihood earnings and also to borrow loans . Employment barriers: Nowadays all salary and other financial benefits from various sources like Governments scholarships , any compensation , grants , reliefs , etc are pa id through bank accounts. Loss due to theft : Banks provide various schemes of safety locker facility . It mitigat es the risk due to thefts . Other allied financial services : People who do not have bank accounts may not go t o bank as for as possible . So they lack basic financial auxiliary services like DD ,Insu rance cover and other emergency need loans Etc .

Other Consequences:

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FINANCIAL INCLUSSION IN INDI

RBI AND FINANCIAL INCLUSION

Reserve Bank of India role and Initiatives The reserve bank of India (RBI) has indicated a number of recent measures to improve credit

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- http://www.docx-to-doc-converter.com delivery mechanism and bring about maximum financial inclusion of poorer sections of the s ociety. Banks have been urged to make available a basic banking 'no frills' account either with 'nil' or very low minimum balance and charges with a view to make such accounts accessible to vast sections of the population. As a result of the measures taken for financial inclusion, between end-March 2007 and end-March 2008, more than 9 million new 'no frills' bank accounts were opened by Schedule Commercial Banks in India (the total number of 'no frills' accounts stood at 15,788,919 as end-March 2008)16. Regional Rural Banks have been advised to allow limit ed overdraft facilities in 'no frills' accounts, without any collateral. Provision of such overdraf t facility becomes a ready source of funding to the account holder, thereby inducing them to o pen such accounts. The 'Know Your Customer' (KYC) procedure for opening accounts has be en simplified so that people from low income groups do not face problems in opening new ac counts. Nationalization as the first step towards financial inclusion The Indian Government has a long history of working to expand financial inclusion. National ization of the major private sector banks in 1969 was a big step. In 1975 GOI established RR Bs with the same aim. It encouraged branch expansion of bank branches especially in rural ar eas. The RBI guidelines to banks shows that 40% of their net bank credit should be lent to the priority sector. This mainly consists of agriculture, small scale industries, retail trade etc. Mor e than 80% of our population depends directly or indirectly on agriculture. So 18% of net ban k credit should go to agriculture lending. Recent simplification of KYC norms are another mi lestone. In fact the nationalisation of the of the major banks and unprecedented growth of banking int he country should be seen as the first phase of financial inclusion. Between 1970-71 and 200 9-10, the total deposits have multiplied 760 times. The per capita deposits have increased fro m RSs.109 to Rs.32,225. As much as 59% of adult population has deposits account and about 14% have loan accounts. This number should viewed in the dismal backdrop at the time of na tionalisation.

THE PRIORITY SECTOR APPROACH...... The administrative framework for rural lending in India was provided by the Lead Ba nk Scheme introduced in 1969, which was an important step towards implementation of the two-fold objectives of deposit mobilisation on an extensive scale and stepping u p of lending to weaker sections of the economy. Realising that the flow of credit to e mployment oriented sectors was inadequate; the priority sector guidelines were issued to the banks by the Reserve Bank in the late 1960s to step up the flow of bank credit t o agriculture, small- scale industry, self-employed, small business and the weaker sect ions within these sector. The target for priority sector lending was gradually increased to 40 per cent of advanc

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- http://www.docx-to-doc-converter.com es in the case of domestic banks (32 per cent, inclusive of export credit, in the case of foreign banks) for specified priority sectors. Sub targets under the priority sector, alon g with other guidelines including those relating to Government sponsored programme s, were used to encourage the flow of credit to the identified vulnerable sections of the population such as scheduled castes, religious minorities and scheduled tribes. The Di fferential Rate of Interest (DRI) Scheme was instituted in 1972 to provide credit at co ncessional rate to low income groups in the country. Lead Bank Scheme..... But all these measure were focused towards inclusion of a sector, regional areas etc., t here was a very less or no emphasis was on financial inclusion of Individual/househol d level. The promotional aspects of banking policy have come into greater prominenc e. The major emphasis of the branch licensing policy during the 1970s and the 1980s was on expansion of commercial bank branches in rural areas, resulting in a significan t expansion of bank branches and decline in population per branch. The branch expans ion policy was designed, inter alia, as a tool for reducing inter-regional disparities in b anking development, deployment of credit and urban-rural pattern of credit distributio n. In order to encourage commercial banks and other institutions to grant loans to vari ous categories of small borrowers, the Reserve Bank promoted the establishment of th e Credit Guarantee Corporation of India in 1971 for providing guarantees against the r isk of default in repayment. The scheme, however, was subsequently discontinued.

No Frills Account... In a recent move, the RBI has urged the banking community to introduce the no-frills account to bring a large section of under-privileged people into the banking net. The idea has been pro pelled by the realisation that even with 70,000 bank branches in the country, a large section o f the population continues to remain credit-starved. The no-frills bank accounts will, therefore, be an innovative instrument to introduce the conc ept of banking to the under-privileged and reduce credit rationing for this section of people. A s the individual bank would have the privilege to design these no-frills accounts, the basic cha racteristic would involve zero or a very low balance with limited transaction facilities. JK bank... SB Ujala- No frills account... Main features..

A variant of Saving Bank account to ensure financial inclusion and to strive for makin g banking services easily accessible to all segments of society.

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Minimum initial deposit is 50/-. However, customers also allowed to open the account with a banking instruments like Banker's cheque, etc. However, minimum balance of 50/- is mandatory to keep the account operational. The maximum balance in a SB Ujala account shall be 50,000/-. The maximum credits allowed in a SB Ujala 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 bala nce of 1000/- and above for past 6 months

KYC norms... The Know Your Customer (KYC) norms were revised in order to make it easy for people to a vail financial services on February 18, 2008. These guidelines include In case of close relatives who find it difficult to furnish documents relating to place of residen ce while opening accounts, banks can obtain an identity document and a utility bill of the rela tive with whom the prospective customer is living, along with a declaration from the relative t hat the said person (prospective customer) wanting to open an account is a relative and is stay ing with him/her. Banks can also use any supplementary evidence such as a letter received thr ough post for further verification of the address;banks have been advised to keep in mind the spirit of the instructions and avoid undue hardships to individuals who are otherwise classifie d as low risk customers; Banks should review the risk categorization of customers at a periodicity of not less than onc e in six months. Further, in order to ensure that persons belonging to low income group both in urban and rura l areas do not face difficulty in opening the bank accounts due to the procedural hassles, the KYC procedure for opening accounts has been simplified for those persons who intend to kee p balances not exceeding rupees fifty thousand (Rs. 50,000/-) in all their accounts taken toget her and the total credit in all the accounts taken together is not expected to exceed rupees one lakh (Rs.1,00,000/-) in a year

SHG models
A Self Help Group (SHG) is a group of about 15 to 20 people from a homogenous class who join together to address common issues. They involve voluntary thrift activities on a regular b asis, and use of the pooled resource to make interest-bearing loans to the members of the grou p. In the course of this process, they imbibe the essentials of financial intermediation and also the basics of account keeping. The members also learn to handle resources of size, much bey ond their individual capacities. They begin to appreciate the fact that the resources are limited and have a cost. Once the group is stabilized, and shows mature financial behaviour, which generally takes up to six months to 1 year, it is considered for linking to banks. Banks are encouraged to provide loans to SHGs in certain multiples of the accumulated savings of the SHGs. Loans are given without any collateral and at interest rates as decided by banks. Banks find it comfortable to l end money to the groups as the members have already achieved some financial discipline thro ugh their thrift and internal lending activities. The groups decide the terms and conditions of l

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- http://www.docx-to-doc-converter.com oan to their own members.

ad omestic handmade machine used for making carpets at kahdi and village industry l evel RANGARAJAN committee
The Government in June 2006, had constituted a Committee to prepare a strategy of Financial Inclusion. The Ten Member Committee, was constituted under the Chairmanship of Dr. C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister. Th e Committee submitted its final Report on January 4, 2008. The Report viewed financial inclu sion as a comprehensive and holistic process of ensuring access to financial services and time ly and adequate credit, particularly by vulnerable groups such as weaker sections and low-inc ome groups at an affordable cost. Financial inclusion, therefore, according to the Committee, should include access to mainstream financial products such as bank accounts, credit, remitta nces and payment services, financial advisory services. The terms of reference of the Committee included: i) To study the pattern of exclusion from access to financial services disaggregated by region, gender and occupational structure. ii) To identify the barriers confronted by vulnerable groups in accessing credit and financial s ervices, including supply demand and institutional constraints. iii) To review the international experience in implementing policies for financial inclusion an d examine their relevance/applicability to India. iv) To suggest - strategy to extend financial services to small and marginal farmers and other vulnerable gro ups, including measures to streamline and simplify procedures, reduce transaction costs and make the operations transparent.

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- http://www.docx-to-doc-converter.com - measures including institutional changes to be undertaken by the financial sector to implem ent the proposed strategy of financial inclusion. - a monitoring mechanism to assess the quality and quantum of financial inclusion including i ndicators for assessing progress. The Committee submitted its final Report on January 4, 2008. The Report viewed financial in clusion as a comprehensive and holistic process of ensuring access to financial services and ti mely and adequate credit, particularly by vulnerable groups such as bank accounts, credit, re mittances and payment services, financial advisory services and insurance facilities. Government had been concerned that despite the vast expansion, modernization and diversifi cation of ownership of financial institutions, a large number of vulnerable groups remain excl uded from the opportunities and services provided by the financial sector. Such excluded gro ups include women, small and marginal farmers, people in the unorganized sector, the self e mployed and the pensioners. Government was anxious to correct this situation and extend the reach of the financial sector to such vulnerable group by minimizing, if not eliminating, the f ormal and informal barriers to access encountered by such groups. The Rangarajan committee has systematically gone into the question of financial inclusion in India, assessed the enormity of the problem, diagnosed the underlying factors, defined the ap propriate approach to the problem, identified the player to be involved and draw a road map f or implementation of the financial inclusion plan. The plan has been put on a mission mode t o drive home the seriousness of the task on the hand. The task is no doubt gigantic given the s ize of our population and the complexities of the society. Keeping in view the enormity of the task involved, the Committee recommended the setting u p of a mission mode National Rural Financial Inclusion Plan (NRFIP) with a target of providi ng access to comprehensive financial services to at least 50 per cent (55.77 million) of the ex cluded rural households by 2012 and the remaining by 2015. This would require semi-urban a nd rural branches of commercial banks and RRBs to cover a minimum of 250 new cultivator and non-cultivator households per branch per annum. The Report of the Committee on Financ ial Inclusion Committee has also recommended that the Government should constitute a Nati onal Mission on Financial Inclusion (NaMFI) comprising representative of all stakeholders fo r suggesting the overall policy changes required, and supporting stakeholders in the domain o f public, private and NGO sectors in undertaking promotional initiatives.

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Jammu & Kashmir bank profile........

Jammu & Kashmir Bank is the only Bank in the country with majority ownership vested with a state government the Government of Jammu & Kashmir. J&K Bank functions as a universal bank in Jammu & Kashmir and as a specialised bank in th e rest of the country. It is also the only private sector bank designated as RBIs agent for bank ing business, and carries out the banking business of the Central Government, besides collect ing central taxes for CBDT. J&K Bank follows a two-legged business model whereby it seeks to increase lending in its ho me state which results in higher margins despite modest volumes, and at the same time, seeks to capture niche lending opportunities on a pan-India basis to build volumes and improve mar gins. J&K Bank operates on the principle of socially empowering banking and seeks to deliver in novative financial solutions for household, small and medium enterprises. The Bank, incorporated in 1938, and is listed on the NSE and the BSE. It has a track record o f uninterrupted profits and dividends for four decades. The J&K Bank is rated P1+, indicating the highest degree of safety by Standard & Poor and CRISIL.

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The Jammu and Kashmir bank CHO

Revised financial inclusion plan framed by bank......

Financial Inclusion Plan (FIP) of the Bank aims at providing basic banking services to unban ked population in rural areas through the permitted Models of (a) Brick & Mortar Model, wh erever found feasible, and (b) through Business Correspondent Model. The coverage shall als o extend to unbanked population in urban areas. As a first step in this direction, the basic req uirement of identification of unbanked population and opening of No- frills accounts, which can be opened without the usual compulsion of maintaining minimum balance in these accou nts, shall be completed on priority basis. No- Frills accounts shall be opened for financially e xcluded segments of the unbanked population. The Financial Inclusion shall ensure availabili ty of at least four products viz., No- frills Saving Bank account, Entrepreneurship credit in th e form of GCC/KCC, recurring deposit and small value fixed deposit accounts, remittance fa cility and micro insurance- life and non- life products. The coverage shall be extended, in a p hased manner, to all unbanked villages of the State mainly through Business Correspondent Model.

Objectives ...
The main objective of the Financial Inclusion Plan of the Bank is to provide basic banking services to the unbanked adult population of the State, both in rural and urban areas, either th

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- http://www.docx-to-doc-converter.com rough the traditional Brick & Mortar Model or through CSCs (named as Khidmat Centers) u nder the Business Correspondent Model. Opening of No-frills accounts shall be followed by provision of essential banking services through Smart Cards at Khidmat Centers under Busin ess Correspondent Model. In addition to basic saving products, other banking services to be provided to unbanked population would include extension of credit facilities, remittance and micro insurance products for achieving deeper Financial Inclusion. The scope and extent of b anking services under Business Correspondent Model shall be regulated within the ambit of s ervices permitted by RBI and reviewed from time to time by FID, CHQ.

Business correspondent (or village level entrepreneur)......a connect ing link between banks and the customer.....
BCs have an important role to play in the overall process of financial inclusion as they are pe rsons who actually come in contact with the people who are in need of banking services and t hus can for them play the important role of connecting link. They activities of BCs range fro m providing awareness and education to assistance in distribution of micro-life and non life i nsurance. The various activities of BCs include the following:a. Awareness and education Create awareness about savings and other deposi t products/ loan products / and other banking facilities available.

b.

Identification of unbanked population and customer enrolment for opening of

No Frills Saving Bank accounts, current deposit accounts, recurring deposit accounts fixed deposit accounts

c. Identification of borrowers for GCC/KCC facility d. Management, distribution & operations in Smart Card accounts. e. Handling of cash receipts and payments in Smart Card Saving Bank accounts opened at the Base Branch. f. Handling of cash deposit of monthly installments in RD accounts opened at the Base Branc h with PoT access g. Handling of disbursements in pre- sanctioned loan accounts, sanctioned by the Base Branc h.

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- http://www.docx-to-doc-converter.com h. Handling small value transfer remittances i. Issuing Statement of accounts

COST ASSUMPTION...... Assumptions for cost estimates:

1. Point of Terminal Machines (POT): The Bank will keep a POT at each CSC and initially at the link Business Unit. The cost of eac h POT is Rs 30000/-.

2. Server Costs: Since the Bank is covering more or less the whole State beyond March 20 13, the Bank shall need additional storage and need to spend on procurin g additional servers.

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3. Smart Cards: The Bank shall issue finger print based photo smart cards to all fresh No Fr ills Accounts and also existing accounts under MGNEGA and ISSS/NOAPS. The cost of each smart to the bank is Rs 50/-

4. Processing/ Personalization/ Account maintenance charges: These cost to the bank Rs 20/- per account which shall be issued smart ca rds.

Cost Estimates Total cos t for Fixed cost Compo Cost (R No. of Un three yea nents s) its rs 18, Point of Terminal 30,000 600 000,000 10, 1.00000,000 1.00 2, 10,00 Server (Data Centre) 0,000 Storage (Data Centre) 2,00

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0,000 Server (Data Recover 10,00 y) 0,000 Storage (Data Recove 2,00 ry) 0,000 Smart card 50.00

000,000 10, 1.00000,000 2, 1.00000,000 71, 1,425,000 250,000 14, 1,425,000 250,000 14, 1,425,000 250,000 18, 933,000 600 600 933,000 660,000 900,000 2, 160,000 37, 320,000 4, 320,000 20 5,110,000

Processing, personaliz ation per A/c 10.00 A/c maintenance & Tr ansaction charges 10.00 Sourcing of No frills A ccount 20.00 Training costs per ma n day. 1,500 POT AMC per machine per month 100 Establishment Costs Data Centre AMC 40.00 18% p.a

Variable Costs

Approx. Average cost per No. of Uni month ts Total

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54, BC Cost 2,500 600 475,000 000,000 42, 750,000 A/c Maintenance and transaction charges 2.50 Cash Management Ch arges per annum 0.01 Interest foregone Total Grand Total Computation of A ctive Accounts Total No frills Account 56 s with smart cards 6,900 86 NREGA/ISSS Accounts 0,000 Total Accounts with s 1,42 mart cards 6,900 Total Active Accoun 47 ts 5,633 Total Active Accoun ts based on Weight 46 ed Average 5,000

12,000,000 360,000 5, 15%12,000,000 400,000 10 2,510,000 307, 620,000

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Technology and financial inclusion:

Technology plays an important role in the growth and development of the modern econ omy. Technology bridges the gap between people helps in faster communication and int erconnection. Conventional wisdom and methods may not be adequate to address the question of incl usion or bridging the regional disparities. The average size of Indian population served by a bank branch at present is about 16000. While seeking to reduce the average popula tion per branch one should be mindful of the numbers one is talking about. It is for this reason that the Rangarajan committee recommended banks should evolve new models o f effective outreach and leverage on technology based solution.

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A business correspondent demonstrating the use of pot machine

Achievement of greater financial inclusion through Brick & Mortar delivery channels is neit her feasible nor viable. Financial Inclusion efforts have to be technology driven / ICT based with the front end system being seamlessly integrated with the Banks CBS. Integration of U nique Identification (UID) project with FIP initiatives has to be ensured over time. Though all the ICT based financial inclusion models provide significant benefits, The Bank shall use the biometric authentication enabled smart card based transaction on hand held point of transacti on (PoT) devices at the customer service points.

FINO THE TECHNOLOGY SERVICE PROVIDER

The Bank has appointed Financial Information Network and Operations Ltd (FINO) as a tech nology partner for providing ICT based solutions. FINO is one of the leading players in provi ding end-to-end technology and operational solutions to financial institutions in reaching the underbanked areas. The Bank adopted a dynamic process of selecting the technology partner in which domain experts from Business Departments and Technology Department analyzed t he presentations on the ICT based solutions given by various technology providers including

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- http://www.docx-to-doc-converter.com FINO, Financial Software & Systems (P) Ltd, IL&FS Education & Technology Services Lim ited etc. The Bank approached other players in the industry as well which includes A little World (ALW) and Integra Microsystems who have shown unwillingness to work in J&K State owing to the harsh terrain and geographical constraints.

Fino pot machine

Technology Solution
The Bank has started using bio-metric fingerprint enabled smart card platform which is highly secure, efficient and effective. FINO will be solely engaged to issue smart cards to the existing account holders under Social Security payment and MGNREGA benefici aries as well as new account holders which shall be brought under formal financial set u p during financial inclusion initiatives. Each smart card can hold up to fifteen (15) acco unts of the customer and up to ten (10) latest transaction records for each account on th e card in addition to the biometric and personal details of the customer. A record field h as been provided in the smart card for capturing / maintaining UID details of the custo mer as and when these become available.

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A Glimpse of Kidmat Center (common service center)

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The Bank is intending to make extensive usage of Khidmat Centers for providing banki ng services under BC Model. After commissioning of remaining 492 Khidmat Centers i n the first phase, banking services in about 2000 additional villages can be provided un der BC Model. The Government of India has plans to implement commissioning of tota l number of 4000 Khidmat Centers in the State by March, 2015. This development wou ld pave way for providing banking services in almost all unbanked villages of the State. A well defined road map for coverage of unbanked villages of the State can be framed a fter the job relating to identification of sites and commissioning of new Khidmat Center s is completed. In terms of provisions contained in the MOU executed with the State Government, 110 8 Khidmat Centers are to be commissioned in the first phase. The job relating to superv ision and monitoring of the CSC Project implementation has been assigned to CSC Proj ect Department set up at CHQ level. In subsequent phases, around 3000 additional Khid mat Centers are to be commissioned by March, 2015 as required under the guidelines of Government of India. So far 418 Khidmat Centers have been fully commissioned. Abo ut 60 Centers are in the phase of commissioning and 138 sites have been identified for c ommissioning of new Centers. 616 Khidmat Centers are expected to be fully commissio ned by November, 2011. On the basis of mapping of 616 Khidmat Centers commission ed/ under commissioning phase, banking services in 1260 unbanked villages can be pro vided through Khidmat Centers under BC Model. Identification of remaining 492 Khi dmat Centers and mapping of unbanked villages in the close vicinity of new Centers sh all be completed by June, 2011 and banking services in about 2000 additional unbanked villages can be provided. Likewise, more number of villages can be covered with the commissioning of remaining 3000 Khidmat Centers in the State and in this arrange ment all unbanked villages of the state can be covered under FIP. FID, CHQ shall fina lise a supplementary list of additional unbanked villages after identification of sites of n

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- http://www.docx-to-doc-converter.com ew Khidmat Centers to be commissioned and their mapping with unbanked villages and include such identified villages in the coverage in the 2nd phase of Financial Inclusion Plan of the Bank after obtaining approval of BOD. Necessary action in the matter shall be taken and completed by FID, CHQ latest by December, 2011.

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Area visited
Someone has rightly said that practical experience is far better and closer to the real world t han mere theoretical exposure. The practical experience helps the students to view the real w orld closely, which in turn widely influences their perceptions and understanding of the real situation. I personally made visit to a few kidmat centers (common service centre) in the badgam distri ct of valley and got a chance to personally interact with banking correspondent. Personal int erviewing them made to get a firsthand knowledge about the working of kidmat centres.
Contact no of a few business correspondent VLE ID KBUD0001 KBUD0002 KBUD0003 KBUD0004 KBUD0005 KBUD0006 KBUD0007 KBUD0008 KBUD0009 KBUD0010 KBUD0011 KBUD0012 KBUD0013 KBUD0014 KBUD0015 KBUD0016 KBUD001 CSC LOCATION BATPORA/KANIHAMA BATHAR/NARKARA BUDGAM MAIN BUGAM BATPORA CHATTERGAM CHECK KAWOOSA CHECK NO.1 GOWHERPORA HAFROO BATPORA ICHGAM KHAG KHANDA KRALPORA LALPORA BEERWA MOOCHU NASRAULLAHPORA PANZAN NAME ADIL MAJID ZARGAR JAVAID AHMAD BHAT ABDUL HASSAN SHAMEEMA BANO JAVAID AHMAD MIR AIJAZ BASHIR HYDER SHAFI AJAZ AHMAD WANI JAVAID AHMAD AKHOON SYED TAHIR HUSSAIN GYAS U DIN SHAH AKTHAR HUSSAIN MOHAMMAD ASIF BABA SHABIR AHMAD RATHER RUKAYA AKTHAR MUDASIR RAFIQ FAROOQI ABIDA\ CONTACT 9419917276/01951.272328 9797871920/01951.255800 9796718079 8803932703 9906602432 9419489526 /9018435366 9018222474 9858497462 9906736116/9018099943 9858996293/9858996291 9419501313 9469424866 9858398174/9906840646 9858381599/919978781 9797775516/01951255087 9469188249/01951232303

bud bud bud cha cha bud cha cha cha bud mag cha cha mag cha bud cha

not avaliable 9858483380 8803097267 9697398911

1951238165

9419978781

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A business correspondent working in a kidmat centre

Recommendations

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- http://www.docx-to-doc-converter.com Grass root Level Organizations: Involvement of grass root level organizations like far mers' club and NGOs would lead to inclusion of the disadvantaged as they ensure local participation and help farmers in gaining access to credit and technology. A vibrant ext ension machinery would enhance farm productivity and hence, greater demand for bank ing activities in rural areas. For example, NABARD has 28,226 Farmers' Club (as on 3 1 March 2008) spread over various villages in the country. These clubs need to be envis aged as touch points by the banks and can be utilized in the task of financial inclusion. The main advantage in involving such grass root organization is the large multiplier eff ects they generate along with the positive 'demonstration effects' among the target grou ps. Rural Infrastructure: Infrastructure development is an essential prerequisite for attain ing greater inclusive growth. Adequate rural infrastructure facilities and improvements i n terms of availability of electricity, improved connectivity through provision of rural r oads and telecommunications, construction of warehouses and market infrastructure are expected to lead to efficient supply chain management in agriculture and hence greater demand for banking activities in rural areas.

Financial literacy: Lack of knowledge is an important reason for financial exclusion. F inancial education is required to ensure that large sections of population in urban and ru ral areas that do not have access to formal banking and financial services are educated o f the advantages of coming into the fold of such services. It would help in building info rmed consumers and would result in a win- win situation for all. Setting-up of credit co unseling centre by banks, which would advise public on gaining access to the financial system would help in this regard. Mobile Banking: As elaborated in the section on role of technology, banks need to agg ressively adopt mobile banking as a strategy for increasing their outreach in the rural ar eas. This would offset the decline in number of rural branches of schedule commercial banks, a trend visible post 1995. In our country where the majority of the population liv es in rural areas, the mobile phone can be converted into a 'virtual bank'. To operational ise mobile banking, banks need to negotiate with mobile operators and arrive at a mutua lly agreeable solution ( with regard to the technology platform to use, security concerns, etc.). Further, regulatory mechanism to support mobile banking with cash in/ cash out f acilities also need to be put in place as early as possible. Human Resource Constraints: There are human resource constraints also in rural ban k branches. The total number of officers in rural branches of scheduled commercial ban ks including Regional Rural Banks was 59276, which means the ratio of population per officer was 12512 in rural areas while the same was 11120 in urban areas. Inefficient Financial Sector: Problems in credit access are routed in institutional weaknesses like absence of good credit appraisal, risk management tools in banks, etc. An efficient and or

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- http://www.docx-to-doc-converter.com ganized financial sector contributes to growth by mobilizing savings for capital formation and investment and optimizes the capital allocation, which results in productive activities in the e conomy. Technology and computerization can reduce the operational cost in rural areas for p ublic sector banks and customer friendly bank products can be developed with the help of tec hnology. Improvements in credit delivery system by extending timely and adequate credit is a lso required. Technology: As elaborated earlier, technology is the key to providing low cost financial servi ces in rural areas. It can reduce transaction costs sharply and time taken by banks in processin g applications, maintaining accounts and disbursing loans. It has the potential to address the i ssues of outreach and credit delivery in rural areas, in a cost effective manner. However, from the standpoint of 'inclusive banking', it needs to be realized that technology per se is not an en d in itself. For it to be effective, it has to aid the reform process, which intends to strengthen t he co-operative banks, revitalizing the omnipresent primary co-operative credit society, addre ssing the problems of RRBs, etc. The point is that technology should not be seen as a panacea for all ailments affecting the banking sector.

Micro Finance Institutions The rural Micro Finance Institutions (MFIs), which have emerged as a powerful tool for fight ing poverty, may be made a part of the financial system for effective delivery of rural financi al services. The banks need to gear up their rural branches for facilitating bank linkages of S HGs and JLGs where the programmes have not shown satisfactory progress. The Business C orrespondence models (MFIs, NGOs, etc.), as recommended by the Internal Group on Micro Finance (Khan Committee), may also be put in place, will increase banking outreach.

CONCLUSION

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- http://www.docx-to-doc-converter.com Despite the laudable achievements in the field of rural banking, issues such as slow progress i n increasing the share of institutional credit, high dependence of small and marginal farmers on non-institutional sources, skewed nature of access to credit between developed regions an d less developed regions loom larger than ever before. Therefore, the key issue now is to ensu re that rural credit from institutional sources achieves wider coverage and expands financial i nclusion. For achieving the current policy stance of "inclusive growth" the focus on financial inclusion is not only essential but a pre-requisite. And for achieving comprehensive financial inclusion, the first step is to achieve credit inclusion for the disadvantaged and vulnerable sec tions of our society. The state has to play an important role in financial markets. The role itself is necessitated due to pervasive market failures which in the current globalised scenario is not a rare occurrence. In developing countries both market and government as institutions have their limitations, but it is necessary to design government policies that are attentive to those limitations. Financial I nclusion is one such intervention that seeks market mechanism to operate in favour of the poo r and underprivileged. While doing survey it was found that people are not voluntarily excluding themselves from b anking system, most of them have faith in banking and feel that they need banking services. T he need varies from managing cash flow as they earn on daily basis or irregular basis. The reasons behind not approaching banks are mainly the minimum balance requirements wh ich have been taken care by No Frills Bank Account but most of the respondents were not aw are about this type of account. Hence it needs to be advertised; literacy level and awareness a bout various other products/service.

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BIBLIOGRAPHY
Books and reports
Survey of Indian industries 2010 (The Hindu) Financial inclusion RBI initiatives a presentation by Dr. K.C. Chakrabarty Financial inclusion an overview department of economic research and anal ysis Ranjarajan report on financial inclusion

Internet
http://en.wikipedia.org/wiki/Financial_inclusion http://www.greaterkashmir.com/news/2011/May/4/jk-bank-envisions-rs85000-cr-business-40.asp http://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=2718 http://www.scribd.com/doc/24944516/Financial-Inclusion#archive

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GLOSSARY
BC/BF: banking correspondent/facilitator (village level ente rpreneur) KCC norms: know your customer norms FINO: Financial Information Network & Operations Limited SLBC: State Level Bankers Committee NABARD: National Bank For Agriculture And Rural Developm ent GCC: General Credit Card.

SHGs: Self Help Groups POS: Point Of Sale RRBs: Regional Rural Banks MFI: Micro Finance Institute NREGS: National Rural Employment Guarantee Scheme FI: Financial Inclusion ATM: Automated Teller Machine

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