Vous êtes sur la page 1sur 28



Outline :
Definition of Financial Inclusion Why it needed ? Extent of Financial Exclusion Global (not Local) International Monetary Fund (IMF) Report FI in INDIA FI Steps Taken in the Past FI Why did We Fail ? Why FI Now ? Approach adopted by RBI FIPs Performance Analysis

Definition of Financial Inclusion

Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low income segments of society in a fair and transparent manner by mainstream institutional players.

Why it needed ?

Extent of Financial Exclusion Global (not Local) : Not an India specific problem but a global one

2.5 billion adults, just over half of worlds adult population do not use formal financial services to save or borrow..


4.9 Billion Adult


2.5 Billion Adult

2.4 Billion Adult

2.2 Billion in Africa,Asia, Latin America,and the Middle East

1.2 Billion in Africa,Asia,Latin America,and the Middle East

800 million, live on less than $5 per day

International Monetary Fund (IMF) Report

International Monetary Fund (IMF) Report

International Monetary Fund (IMF) Report

Extent of Financial Exclusion -India

In India,almost half the country is unbanked. Only 55 per cent of the population have deposit accounts and 9 per cent have credit accounts with banks. Just 18 per cent had debit cards and less than 2 percent had credit cards. India has the highest number of households (145 million) excluded from Banking. There was only one bank branch per 14,000 people.6 lakh villages in India,rural branches of SCBs including RRBs number 33,495. Only a little less than 20% of the population has any kind of life insurance and 9.6% of the population has nonlife insurance coverage.

RBI set up the Khan Commission in 2004 to look into FI . In the report RBI exhorted the banks to make available a basic "no-frills" banking account. In India, financial inclusion first featured in 2005, when it was introduced by K C Chakraborthy, the RBI Deputy Governor. Mangalam Village became the first village in India where all households were provided banking facilities.

General credit cards (GCCs) were issued to the poor and the disadvantaged with a view to help them access easy credit. In January 2006, the Reserve Bank permitted commercial banks to make use of the services of nongovernmental organizations (NGOs/SHGs), microfinance institutions, and other civil society organizations as intermediaries for providing financial and banking services.

Financial Inclusion StepsTaken in the Past

Setting up of State Bank of India

Nationalisation of banks
Lead Bank Scheme (1969) RRBs (Regional Rural Bank) Service Area Approach (SAA,1989) Self Help Groups

--- StillWe Failed! ---Why? 5

Absence of BankingTechnology
Absence of Reach and Coverage Absence of Viable Delivery Mechanism Not having a Business Model Rich have no compassion for poor

Why Are We Talking of Financial Exclusion Now?

Focus on Inclusive Growth (Shared growth)

Banking Technology has arrived

Realisation that Poor is bankable

Financial Inclusion Models and Activities

Business Facilitator (BF)
NGOs, Farmer Clubs, Community based organisations, Cooperative Societies, Panchayats, IT enabled rural outlets of Cooperative Entities

Business Correspondent (BC)

Section 25 companies, NBFC not accepting deposit, Post Offices, NGO MFIs under Societies/trusts, MACS

Identification of borrower Collection and verification of primary information Processing and submission of application to banks Monitoring and Follow-up Educating about savings, other products, debt counseling

All activities of BF + Collection of small value deposits Enabling withdrawals Sale of other financial products Receipt and delivery of remittances / payment instruments Disbursal of small value credit and recovery of principal and interest in a limited way 16

Approach adopted by RBI- Some Specifics -1

Achieving planned, sustained and structured financial inclusion.

Technology-To be fixed first.

All Bank branches must be on Core Banking Solution (CBS). All Regional Rural Banks (RRBs) to be on CBS by September 2011. Multi-channel approach (Handheld devices, mobiles, cards, Micro-ATMs, Branches, etc.))

Approach adopted by RBI- Some Specifics - 2

Coverage- Ensure Transparency.

What is meant by Banking Coverage? A village is covered by banking service if either a bank branch is present or a BC is physically present or visiting that village.


Approach adopted by RBI- Some Specifics - 3

Availability of Banking Services means availability of a Minimum of Four Products: A basic No-Frills banking account* with Overdraft Facility. A Remittance Product for Electronic BenefitTransfer and other remittances. A Pure Savings Product ideally a recurring or a variable recurring deposit (FD). Entrepreneurial Credit such as General Credit Card, Kisan Credit Card.
* (A No-Frills Account is one for which no minimum balance is insisted upon and for which there are no service charges for not maintaining the minimum balance.)


Twin Aspects of Financial Inclusion

Financial Inclusion and Financial Literacy are twin pillars.
Financial Literacy
Demand Side


Financial Inclusion
Supply Side

Financial Literacy & Credit Counseling Centers Knowledge of products Need for total products & services

Financial Markets ,Banks & Services 13 Appropriate Design of products & services

What are RBIs initiatives in tackling the demand side issues?

Persuading State Governments for including Financial Education in the school curriculum. Advising Banks to setup Financial Literacy & Credit Counseling Centers in all districts. RBI has conducted outreach activities across the country focusing on the twin objectives of financial inclusion and financial literacy in which the Top management like Governor/Deputy Governors / Executive Directors of RBI directly participate.


160 remote unbanked villages selected by RBI for transformation into Model Villages characterized by 100% Financial Inclusion through ICT initiatives, leveraging on BCs and BFs. Project Financial Literacy- Publication of Comic Books, Setting up Multi-lingual Financial Education Website, Release of a Book titled I can do Financial Planning on Financial Education, Essay Writing Competition and other events. Organizing Town Hall Events and release of films on Financial Literacy.

Financial Inclusion The Indian Way (2010)

Business Correspondent (BC) Model based on solutions
from ICT to encourage low cost doorstep banking services in remote villages. Board approved Financial Inclusion Plans (FIPs) of banks for 3 years, starting April 2010. Roadmap to cover villages of above 2000 population by March 2012
Mandatory opening of 25 % of new branches in unbanked rural centers. Know Your Customer (KYC) requirements for opening bank accounts relaxed for small accounts


Completed 2 years of implementation of Board approved self set FIPs in March 2012. 3171 rural branches opened during the two year period. BCs deployed - tripled in 2 years from 33042 to 96828. Total No. of banking outlets gone up- from 54258 to 147534. 54 Million NFAs added. ICT based accounts -Substantial growth - Percentage of ICT accounts to total NFAs-increased from 25 % to 50%. Ascending trend in OD Accounts. 4.8 million KCC and about 1 Million GCC added.

Achievements cannot be ignored - Nearly 100 Million no frills accounts have been opened by banks so far. When we started, we were all saying people have no bank accounts, now with bank accounts being opened we are complaining that there are no transactions in these accounts. Banks need to be given time for making these NFAs active.

FIPs- Achievements at a glance

Year ended Mar 10 33042 21475 32684 99 54258 49.33 0.13 12.54 7.48 17.63 .45 Year ended Mar 12 96828 24701 120355 2478 147534 103.21 1.52 52.07 21.76 22.34 1.27 Progress -April 10 - Mar 12 63786 3226 87671 2379 93276 53.88 1.39 39.53 14.28 4.71
26 .82

No. of BCs/BC Agents Deployed Banking Outlets through Branches Banking Outlets through BCs Banking Outlets-Through other Modes Total Banking Outlets No Frill A/Cs (No. in Millions) Overdraft- No Frill A/Cs (No. in Millions) BC- ICT Based A/Cs (No. in Millions) EBT A/Cs-through BCs (No. in Millions) KCC(No. in Millions) GCC(No. in Millions)

References :
http://egov.eletsonline.com/2012/01/working-to-furtherfinancial-inclusion/ http://www.imf.org/external/index.htm http://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.as px?Id=2718 http://www.rbidocs.rbi.org.in/rdocs/Speeches/PDFs/FIC0 60911DG.pdf rbidocs.rbi.org.in/rdocs/content/ppts/FIC060911DG.ppt http://www.rbi.org.in/scripts/AnnualPublications.aspx?he ad=Basic%20Statistical%20Returns

Thank you.