Role of rural co-operative credit societies in promoting financial inclusion : A case study of cooperative societies from Vasai Taluka

Subhash Dsouza, Assistant Professor, St.Joseph College of Arts and Commerce, Mumbai University Subhash.sof@gmail.com

Introduction: Financial Inclusion is emerging as a global hot topic. The G-20 has launched a Financial Inclusion Expert Group; the U.N. has appointed Princess Maxima of the Netherlands as Special Advocate for Inclusive Finance; and policy makers from India to Brazil to Mexico are publishing papers and holding conferences about how to get more services to more people. According to the United Nations, three billion people around the world do not have access to formal financial services like savings accounts, credit, insurance, and payment services. More than half the populations in developing countries and more than 80 percent of households in most of Africa are financially excluded. Financial inclusion aims to provide the timely delivery of various financial services at an affordable price to those financially excluded households and micro, small and medium-sized entrepreneurs. To address the issue of such financial exclusion in a holistic manner, it is essential to ensure that a range of financial services is available to every individual. Providing banking facilities across length and breadth of the country, particularly in rural areas, has always been a great challenge for the successive governments since Independence. Nationalization gave a big boost to expansion of banks in rural areas with Public Sector Banks becoming important instruments for advancement of rural banking and changing lives of rural populace. However, financial inclusion remains one of the biggest challenges before our nation even today as only about 38% of bank branches are in rural areas and only 40% (approx.) of the countrys population have bank accounts.

Though strides have been made in expansion of bank branches from around 8700 at the time of bank nationalization in 1969 to around 87,000 presently, only 32,000 (approx.) are in rural areas.

The average population per bank branch is around 13,900. To address this need the Union Finance Minister in his Budget Speech 2010-11 directed all banks, to provide appropriate banking facilities to habitations having population in excess of 2,000 by March, 2012 using various models and technologies including branchless banking through Business Correspondents.

On this background co-operative credit societies can play very important role in reaching out to the weaker section of the society. It is one of the best platform through which financial inclusiveness policies could be promoted. In Vasai Taluka (Maharashtra) co-operative movement started in the year 1918. It has played very important role in the development of Vasai Taluka. Presently there are 4245 co-operatives in Vasai Taluka. Out of this there are more than 200 cooperative credit societies. Cooperative credit societies can play important role in reaching to the last person of the society. The study of role of co-operative credit societies in promoting financial inclusion aims to find out whether cooperative credit societies could become powerful instrument in promoting financial inclusiveness policies. How far these co-operative credit societies have become change agent in development of Vasai Taluka. The problems faced by co-operative credit societies in reaching the weaker section of the society. It also aims at preparing the strategies for cooperative credit societies so as to promote financial inclusiveness policies. Co-operation and co-operative movement are the words that are not unfamiliar to villages and rural areas. Rural development cannot be solely equated with one or two segments or economic strata of rural areas. It is a sum total of an integrated functioning which constitutes and covers all the segments of the society and includes total rural development. Financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector. Inclusive Growth by its very definition implies an equitable allocation of resources with benefits accruing to every section of society. The issues before the researcher are: 1) Can co-operative movement play important role in implementing the idea of financial inclusion?

2) Whether the dream of total rural upliftment can be achieved through financial inclusiveness policies? 3) Can the platform of Co-operative Credit Societies be helpful in promoting Inclusion? Financial

At micro level Vasai Taluka becomes a useful pilot study to taste the tenet of co-operative movement and assess the role of co-operative credit societies in successful implementation of financial inclusiveness policies. Therefore the proposed title of the research study is, Role of rural co-operative credit societies in promoting financial inclusion for achieving rural development: A case study of cooperatives credit societies from Vasai Taluka. Improvement/Recommendations 1) 2) 3) 4) 5) 6) 7) 8) 9) Employee customer relationship. Automation of work and simplification of procedures. Working hours-relation basis seven days week may be experimented. Automated Teller Machines(ATMs) Clearing outstation instrument-by computer network Credit card/Debit card services Get innovation business trends Foreign exchange transactions-see the feasibilities. Undue monetary concessions to the bank staff like interest fee advance, loans on low interest, service charger or banking operations must be dispensed with. 10) Steps for rapid mobilization in rural areas-to start various deposits schemes like daily collection scheme etc. 11) Training to bank staff-for proper customer services. 12) Educating the customers-conducting seminars for customers. 13) Linking all the branches with computer network.

It is widely recognized fact that banks play a major role in the economic development process improvement in productivity is an indispensable means to improve the performance of banking sector. By appraising staff, motivation, optimum utilization of workforce should be ensured.

Due emphasis on agriculture, small scale industry and lease financing to rural sector etc. should be given. Top priority to provide satisfactory service to their customer satisfaction is important factors to be kept in mind. Following must be sincerely studied: 1) What kinds of service do different customers need? 2) 3) 4) What is the range of their demand? How the people can be motivated to come to banks to buy the services? During what time of the day, week, month etc, do customers desire to have their service? 5) Which of the existing service match with the needs of the markets?

Quick and fair services to all customers at all the time and is the dealing should be the norms for the efficient costumer services by banks and then only the Indian Sanskrit Saying GRAHAK DEVO BHAVA will be satisfied. SUGGESTIONS: 1) Evening counter is one of the needs of human being which should be provided by all the branches. 2) Extension counter services are also an important service which should be provided by all the branches. 3) Education and marriage are the social need of man and for this deposits scheme should also be provided by all the branches. 4) Permanent income scheme and yearly income scheme deposits should also be provided by all the branches. 5) Customers day which is on 15th of every month should take seriously and observed by all the br5anches.

Despite the fairly broad banking coverage nationwide, the financial system remains inaccessible to the poorest people in India. The practice of small scale saving through co-op. societies can become the harbinger of growth in the backward regions of the country.

Poor people do not get loans from commercial banks or private banks because they can not any guarantee to repay or because there capacity to save is perceived to be highly risky.

References: 1. Misra S K, Indian Economy, Himalaya Publishing House, sixteenth Edition 1998. 2. Ramkishen Y, Management of Co-operatives. Jaico Publishing House 3rd Impression, 2005. 3. Rayuda C S, Rural Credit in India, Mittal Publications, New Delhi, 1991. 4. Shrivastava A K, Integrated Rural Development Programme in India, Deep and Deep Publications, New Delhi. 5. Sundarajan S, Dimensions of Co-operative Management, Mittal Publications, New Delhi, 1991. 6. Wadvah D, Rural Banks for Rural Development, Macmillion Company of India limited, Bombay.