Cost –Benefit and Usage Behaviour Analysis of No Frills Accounts: A Study Report on Cuddalore District - S.Thyagarajan, CAB-RBI - Jayaram Venkatesan, CMF-IFMR Introduction
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Cost –Benefit and Usage Behaviour Analysis of No Frills Accounts: A Study Report on Cuddalore District- S.Thyagarajan, CAB-RBI- Jayaram Venkatesan, CMF-IFMR
The no frills initiative could have a significant bearing on a very large portion of the population since, if executed properly, it has the capability to bring them into the banking net by offering variety of financial services at affordable costs. However, it also involves a huge cost in terms of account opening and maintenance for the banks and also requires careful implementation in phases
This study was aimed to analyze the results of the financial inclusion drive in Cuddalore district to monitor the gap between the scheme’s objective and what has happened on the ground. The study will cover three aspects of the drive namely
Total number of branches – 173
Total number of villages per branch – 5
Total households – 5.1 Lakhs
Total Villages and wards - 1254
Total Number of Households in Cuddalore
Total Number of No frills account opened
Total households for which No frills account opened
Average balance per account for customers (with balances less than Rs 30000) had increased from Rs. 533 when they opened the account to Rs. 1195 after 12 months.
Sample size – 560 accounts
Roughly 30 to 60 accounts from
The percentage of customers with balance less than Rs. 500 had come down drastically from 78 per cent to 46 percent. This indicated that at least 32 percent of the operating customers had increased their savings over the year.