By R.S.

BRARIA

Socialism is... not only a way of life, but a certain scientific approach to social and economic problems - Pandit Jawaharlal Nehru (First Prime minister of India)

Out of total 1065 million population, 514 million are female. Out of 6,00,000 rural habitations across the country, only 30,000 rural habitations have commercial Bank Branches 60% of the population do not have Bank Accounts and life insurance cover is less than 10% 51.4% of the farmer households are financially excluded from both formal and informal sources Out of the total farmer households, only 27% access formal sources of credit 73% of the farmer households access funds from informal sources like local money lenders

Reasons for Financial Exclusion: Illiteracy (34.62%) Female Illiteracy (45.72%) Distance from the nearest Bank Branch resulting in longer commuting time to the branch Rigid Banking rules and procedures to commence Banking relationship Lack of Awareness of Products and services Psychological and Cultural Barriers Lack of suitable Products tailor made to their needs and infrastructure Involves small value transactions resulting in high transaction cost Banks Perceptions: Financial Inclusion is not just a Regulatory Directive or as Corporate Social Responsibility of Banks Financial Inclusion is now perceived as a commercially viable business which facilitates outreach of banking and financial services to excluded It provides the opportunity to Banks to create capacity building, to support livelihood programs and to add economic value

Marginal Farmers Landless Farmers Oral Lessees Self Employed Urban slum developers Migrants Minorities Social excluded groups Senior citizens Women

Savings/ Thrift Loans/ Credit Remittance / Transfer of Funds Micro Insurance Services (Life and Non- Life) Mutual Funds/ Annuity Products Pension Products

Targets fixed for each Branch of Commercial Bank/Regional Rural Bank to :

Open 250 accounts every year Issue 100 Farmers Credit Card Issue 100 General Credit Card Distribute 100 micro insurance policies

Micro Finance Sector (Development and Regulation) Bill Setting up of Rural Credit Information Bureau. Ensuring effectiveness of Business Facilitator(BF) /Business Correspondent(BC). Micro finance Development and Equity Fund Micro finance Ombudsman Regulatory and developmental power to NABARD

Financial Inclusion Fund (FIF) Rs 5000 million Financial Inclusion Technology Fund (FITF) Rs 5000 million Govt. of India : RBI : NABARD (40:40:20)

The objectives of the FIF shall be to support developmental and promotional activities with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions / hitherto unbanked areas.

The objectives of the FITF shall be to enhance investment in Information Communication Technology (ICT) aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, increase the technological absorption capacity of financial service providers / users and encourage an environment of innovation and cooperation among stakeholders.

Smart card, hand held terminal, central CPU Low cost ATMs Mobile Phone Banking SMS Banking Public Call Office (PCO) Connectivity.

Branchless banking comprises essentially all of the following elements Use of technology, such as payment cards or mobile phones, to identify customers and record transactions electronically and, in some cases, to allow customers to initiate transactions remotely Use of (exclusive or nonexclusive) third party outlets, such as post offices and small retailers, that act as agents and enable customers to perform functions that require their physical presence, such as cash handling and customer due diligence for account opening Offer of at least basic cash deposit and withdrawal in addition to transactional or payment services Structuring of the above so that customers can use these banking services on a regular basis (also available beyond normal business hours) Advantages: Service provided at their doorstep/ village also results in Time saving User friendly and Hassle free for the villagers as there are no challans/vouchers The Business correspondent (BC) being a permanent resident of the village and hence knows the people and their requirements and can assist customers at any time of the day Reduces the cost of transaction Ability to handle large volumes with less staff Reduces the pressure on the counters at rural branches

Entrepreneurship in rural India can revolutionize the Indian economy The following are the benefits provided by the government to encourage Rural Entrepreneurship:
Tax holidays and other tax advantages given to rural projects. Banks to achieve 20% yearly growth in Micro and Small Enterprises Advantage of local and regional resources in case the unit uses them as a raw material. Number of Accounts of Micro Enterprises to increase by 15% every year All loans to Micro & Small Enterprises to be collateral free up to Rs. 10 lakhs (US $ 20000) Competitive advantage over the big business due to the proximity to the raw material and labor. Employment generation for local people Measures taken to nurture rural entrepreneurship: Training and development Government to conduct industrial area potential survey to estimate the kind of industries that can be set up and provide the information to the local residents. Concessions like tax holidays, subsidy etc provided.

 Envisage

Building an Incredible India

THANK YOU ALL