&. CREDIT COUNSELLING. FINANCIAL INCLUSION. 16 th January 2009. College of Agricultural Banking, RBI, Pune. PRIORITY SECTOR & LEAD BANK DIVISION ATMARAM HOUSE, 1, TOLSTOY MARG NEW DELHI 110 001. FINANCIAL INCLUSION CELL. What is the magnitude of Financial Exclusion in India ?.
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16th January 2009
College of Agricultural Banking, RBI, Pune
PRIORITY SECTOR & LEAD BANK DIVISION
ATMARAM HOUSE, 1, TOLSTOY MARG
NEW DELHI 110 001
FINANCIAL INCLUSION CELL
Rural - 60 %
Urban - 39 %
Exclusion from the payment system -
Exclusion from the credit
NSSO Survey 59th Round : 73% of farm households
have no access to formal sources of credit;
Rural Poor – Income Level
Urban Poor – Income level
Access to payment systems
Delivery of Banking & Financial Services
Timings & other conveniences
Education - Health, Insurance, equity, etc.
Penetration to deepest geographies
Functional Financial Inclusion
Financial Inclusion - A burden or an opportunity?
Why is it in focus?
Where the future lies?
Where are all roads leading to?
Vast opportunities exist, where?
The Opportunity lies :-
At the bottom of the pyramid
In deepest geographies
At last mile stone
In remote corners
In unreached villages
Across untraveled roads
Across underprivileged segments
BANK ACCOUNT : KEY TO FINANCIAL INCLUSION
Used Target Groups
Vast Geographical Spread
Small Value and High Transaction cost
Infrastructure-Technological, Administrative, Organizational
WHAT limits access to financial services?
THUS SOCIAL EXCLUSION IS AN INTEGRAL PART OF FINANCIAL EXCLUSION
How to achieve financial inclusion?
HOW TO ACHIEVE FINANCIAL INCLUSION ?
Smart Card (to be provided to every customer)
Point of Sales Machines (PoS) for reading and writing Smart Cards for transactions
TECHNOLOGY : AN ENABLER
Technology plays an important role in achieving financial inclusion by allowing branchless banking at the doorstep of clients in remote/low population density areas.
Usage of Biometric smart cards/Mobile technology to increase the outreach and to reach the Last Mile Villages.
Technology should help transact basic banking transaction in a :
TECHNOLOGY : AN ENABLER
Web Camera forPhotograph
Optical Biometric scanner for Fingerprints
Pad for Signature capturing
Battery Power back-up for undisrupted enrolment
Smart Card (to be provided to every Customer) and Point of Sales Machines (PoS) for reading and writing Smart Cards for
Laptop with webcam, biometric devices - for capturing the
account opening details, thumb impression, photo and
Process Flow – Enrolments
Post sign-off from the
Bank, the forms are sent
for Data-entry to Service
of the customers are
captured and cards are
distributed by Agents.
accounts are opened.
Account opening forms
are filled on the field by
Business Process - Transactions
stored on card
Service Provider’s Systems
VARIOUS PROCESSES OF TRANSACTION
Pre –Enrolment Process Enrolment Process
Enrolment ProcessTransaction Process
Financial INclusion : An Opportunity exists
Financing the poor is?
Janmitra Rickshaw Project
Integrated Development Project at Punpun-Patna
Bhamashah Financial Empowerment Project-for BPL families
Common Service Centre Project- Financing VLEs
Mother Dairy Tie up Project
PROJECT FOR CONSTRUCTION WORKERS AT BANGALORE
Sustainable Community Development
RBI advised SLBC – FLCC at one district
Objectives- Counseling through face to face interaction
Financial Education - financial products & services
Benefits-Savings, Managing Money, Credit Counseling and Debt Management
Helping distressed borrowers
FLCC setup by PNB – Punjab – 7, Haryana – 2
Resources- Human, Technological
Promoting own Bank’s products
As an additional duties
No formal training
Affinity to the parents Bank
Dr. K. C. Chakrabarty, CMD along with Sh. Pawan Kumar Bansal (MoS for Finance, GoI), at the inauguration of FLCC at Chandigarh on April 3, 2008
“At PNB, we believe that the poor are bankable, and are laying greater focus on implementing the Financial Inclusion Plan throughout the country in general and Indo Gangetic Plain in particular, where our Bank has major presence.”
“Our vision is focused on widespread financial inclusion - deploying technologies, infrastructure and strategies to take banking to the unreached.”
PNB created history on 2nd October 2007
Launching of 1st Pilot Project at Neemrana,
District Alwar, Rajasthan
Published TWO Booklets on Financial Inclusion Initiatives
TARGETS FOR 2013
By 2012, out of next 250 million Indian wireless users, 100 million (40%) are likely to be from rural areas.
Accessibility : Remoteness of villages
Errors in Account opening and verification process
Relaxation of KYC norms for migrant population
Finding suitable BCs
Pilot projects to go beyond experimental stage.
Indian BPL – 214 Million earning on an average Rs. 10 per day, out of which 16 million people are living in rural areas
Of the world’s 6.4 billion poor, about 2.6 billion live on less than US $2 per day. The poor have largely untapped potential for consumption, production, innovation and entrepreneurial activity. The need is to do business with them so as to bring them out in the market place. This is a sure way of freeing them from the poverty. The more business models integrate and include the poor, the higher are the chances for the companies to increase their revenues while fulfilling the millennium development goals (MDGs)”.
Report by UN Development Programme, “ Creating Value for All: Strategies for Doing Business with the Poor”,
WE HAVE PROMISES TO KEEP AND MILES TO GO BEFORE WE SLEEP