Beruflich Dokumente
Kultur Dokumente
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1969
2005
No frills account.
Poor people can open bank accounts with very low balance e.g. Rs.5 only.
2006
No profit
Because Administrative costs will be high= Building rent, telephone, electricity, staff salary, security
guards.
On the other hand volume of business is very low in village areas=amount of money deposited,
loans taken.
Means there is No profit. Actually itll lead to heavy losses.
Reluctant staff
In many villages, there is no electricity, no good schools/drinking water, naxalite problem= Bank
2. poor
people
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farmers clubs
Community based organisations
Cooperatives societies
Village Knowledge Centres,
Agri Clinics/ Agri Business Centers,
Krishi Vigyan Kendras
Khadi and Village Industries units
corporate entities with IT outlets in rural parts.
Swabhimaan
Initiative by the Finance Ministry + Indian Banks Association
launched in 2011
To bridge economic gap between rural and urban India.
Objectives of Swabhimaan
Make banking facilities available to every habitat with a population >2000 (by March 2012.)
Banks will provide basic services like deposits, withdrawal, Kisan Credit Card (KCCs) etc via
Business Correspondents (BCs) also known as Bank Saathi.
Banks will also working together with the Unique Identification Authority of India (UIDAI) for
opening new bank accounts.
Government will send subsidies and social security benefits (pension etc.) directly to beneficiarys
account.
Beneficiary can withdraw the money from the Business Correspondents (BCs) in their village itself.
Government has provided 500 million rupees to banks for taking these ^initiatives.(e.g. paying
Commissions to Bank Saathi, their training cost, doing paperwork with UID.)
Reforms in BC model
Common BC
Last year Finance ministry came up with this proposal:
India be divided into 20 clusters.
A common BC be appointed for all public sector banks operating in that geography.
Such a move would improve the economics of the BC model. (otherwise so many BCs,
fragmentation=nobody earning decent Commission=nobody improving the service delivery.)
Reserve Bank of India (RBI) has permitted all business correspondents (BCs) working for one
particular bank, to conduct business for other banks as well.
FINO, Indias largest Business Correspondents company
FINO=Financial Inclusion Network and Operations (FINO).
It is promoted by various Public and Private sector banks and insurance companies like LIC.
Last year, FINO become the common Business Correspondents company for all public sector
banks operating in Jharkhand.
NREGA payment
Old system
1. A villager earns some cash
under MNREGA.
2. Government gives cash to
bank.
3. Bank gives it to B.C.
4. B.C. deposits it into MNREGA
workers account.
New system
1. All accounts will be maintained by core banking system.
2. So, cash directly goes from Government > Bank >MNREGA
workers bank account.
3. Villagers will have the freedom to make their withdrawals
from any BC they choose.
Kiosk Banking
The D.I.Y. (Do it yourself) banking services e.g. ATM, internet kiosks = still expensive.
There is also lack of education + awareness in rural areas about such things.
So even if Government /bank installs such automatic ATM, internet kiosks=> most of the time they
just gather dust.
Therefore, technology-based self-service model (e.g ATM, internet kiosks) is not useful at this
stage.
And hence we need Personnel (these Business Correspondents=middlemen). Because often
villagers are illiterate, so they cant even fill up the forms for opening bank accounts or loanapplication or filling the deposit slips etc. Business Correspondents are essential at this stage.
But again problem: The cost per transaction remains high. (Because Bank has to pay commission
to B.C.agent.)
Therefore, Chindu has suggested following solution for long term:
Migrate from banking correspondent model to Kiosk banking = mobile vans fitted with ATM
machines+ biometric devices.
Theyll provide banking services in remote areas.
Mock questions
Q1. Financial inclusion involves
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4.
5.
Ans.choices
a.
b.
c.
d.
Only 1, 3 and 5
Only 1,2 and 5
Only 3 and 4.
All of them
Only 3
Only 1 and 2
Only 2 and 3
Only 1 and 3
Q3. Who among the following, is/are eligible to become Business correspondents for banks?
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2.
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4.
Post office
Panchayats
NGO and Insurance Agents
Self Help Groups (SHG)
Ans
a. Only 1 and 2
b. Only 2 and 4
c. Only 2 and 3
d. All of them.
Descriptive Questions
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Swabhimaan (5m)
Swavalamban (5m)
Common Services Centers scheme (5m)
Write a note on National E-governance Plan (NeGP) (10m)
Define Financial inclusion. Discuss the initiatives taken to achieve financial inclusion. (15m)
Interview
1. Apart from what is already being done, what new initiatives should be taken to achieve 100%
financial inclusion?