financial exclusion fin. inclusion role of fin. inclusion in india progress of financial inclusion pradhan mantri jann dhan yojana pradan mantri suraksha bhima yojana pradhan mantri jeevan jyothi yojana atal pension yojana crisil inclusix banking

1. FINANCIAL INCLUSION
FROM POVERTY TO PROSPERITY
BY
N. RUTHVIK

2. FINANCIAL EXCLUSION

3. Financial Exclusion
NO BANK
ACCOUNT
NO SAVINGS
NO ASSETS
NO
INSURANCE
NO
AFORDABLE
CREDIT
NO
ACCESS
TO
MONEY
ADVICE

4. Illiteracy
Low income
Nil or low savings
Unemployment
Psychological & disability issues
Geographical remoteness
Lack of Information technology
Personal and social factors : Cultural norms, Gender,
Age, Legal identity etc.
Financial Exclusion Reasons

5. • As per Census
2001, in India only
36% of the people
use any kind of
banking services
Financial Exclusion Is Universal
Country/location % of population
with an account
Denmark 99.0
United States 91.0
Europe 89.6
Botswana 47.0
Brazil (urban) 43.0
Swaziland 35.3
South Africa 31.7
Namibia 28.4
Djibouti 24.8
Mexico City 21.3
Lesotho 17.0
Tanzania 6.4

7. One bank branch per 16,000 people.
Population with:
Deposit accounts - 55%
Debit card holders - 18%
Credit accounts - 9%
Credit cards - 2%
Life insurance covered > 20%
Non life insurance covered - 9.6%
72% of the population earning less than Rs. 50,000 doesn’t
have a bank account.
Indian Scenario

8. Financial Inclusion Definition
“The process of ensuring access to financial services and
timely and adequate credit where needed by vulnerable
groups such as weaker sections and low income groups
at an affordable cost”
- The Committee on Financial Inclusion
(Chairman : Dr. C. Rangarajan, 2008)

9. Financial Inclusion Scope
Increase in bank accounts
Increase in bank branches
Immediate credit
Savings in product
Providing insurance
Financial advisory services

10. Initiatives for financial Inclusion
• 1904 Cooperative Credit Societies Act
• 1955 State Bank of India created
• 1969 14 Commercial Banks Nationalized
• 1975 Regional Rural Bank set up
• 1980 6 more Commercial Banks nationalized
• 1992 SHG - Bank Linkage Programme
• 2001 Kisan Credit Card introduced
However, efforts to achieve financial inclusion
have failed

11. Why did we fail?
Absence of technology
Absence of reach and coverage
No proper business model
Poor delivery mechanism
Transaction cost too high
Limitation of cash delivery points
Lack of Interest / Involvement of Big Technology
Players

12. Financial Inclusion Recent Initiatives
No frill accounts
OD in saving banks accounts
Branch expansions
Relaxed KYC forms
NEFT, NECS, IMP etc
Engaging Business Correspondents.
Financial literacy programs

13. Financial inclusion index
• On June 25, 2013, CRISIL ,has launched an index to
measure the status of financial inclusion in India
• The index was INCLUSIX.
• The parameters were
• Branch penetration
• Deposit penetration
• Credit penetration

14. 35.4
37.6
40.1
42.8
50.1
2009 2010 2011 2012 2013
INCLUSIX
* The index value of 50.1 for fiscal 2013 is not directly comparable with the
index value of 42.8 for fiscal 2012, as data for MFIs is available only for the
fiscal 2013.
*

16. Other Initiatives By Government

17. Pradhan Mantri Jan Dhan Yojana

18. • Interest on deposit.
• Accidental insurance cover of Rs.1.00 lac (to be given by
HDFC Ergo)
• No minimum balance required.
• Life insurance cover of Rs.30,000/- (to be given by LIC)
• Easy Transfer of money across India
• After satisfactory operation of the account for 6 months,
an overdraft facility will be permitted
• Overdraft facility upto Rs.5000/- is available in only one
account per household, preferably lady of the household.
Pradhan Mantri Jan Dhan Yojana

20. PROGRESS

21. Banking services

22. The number of branches increased from
68,681 to 1,02,343
Expansion of Commercial Banks

23. The number of BSBD accounts opened increased from
73.45 million in March 2010 to
182.06 million in March 2013.
BSBD bank accounts

24. Up to March 2013, the total number of KCCs issued to farmers
remained at 33.79 million with a total outstanding credit of
Rs.2622.98 billion.
KCC progress

25. SR Particulars
Year
ended Mar
10
Year ended
Mar 11
Year ended
Mar 12
Year ended
March 13
1
Banking Outlets in
Villages –
Branches
33,378 34,811 37,471 40,837
2
Banking Outlets in
Villages – BCs
34,174 80,802 141,136 221,341
3
Banking Outlets in
Villages - Other
Modes
142 595 3,146 6,276
4
Banking Outlets in
Villages –TOTAL
67,694 116,208 181,753 268,454
Status of financial inclusion

27. Financial Inclusion is a win-win situation for the financially
excluded, the Corporates, the Govt. and the Banks.
Bankers can support by financing the Agriculture products
including their preservation and sales.
Corporates can sell / market their products to the large
untapped rural markets.
Conclusion

29. THANK YOU