Understanding Financial Inclusion

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International Workshop on Enhancing delivery Govt. to People Payments for Rural Area 29 th November 2012. Madhya Pradesh Model Paradigm Shift for Financial Inclusion Dr Aruna Sharma ACS, RD, Panchayat & Social Justice. Understanding Financial Inclusion. - PowerPoint PPT Presentation

Text of Understanding Financial Inclusion

  • International Workshop on Enhancing delivery

    Govt. to People Payments for Rural Area

    29th November 2012

  • Madhya Pradesh Model

    Paradigm Shift forFinancial Inclusion

    Dr Aruna SharmaACS, RD, Panchayat & Social Justice

  • Understanding Financial InclusionFinancial Inclusion is an opportunity and not an obligation.Providing easy and hassle free access to financial services.For poor it means creating access to affordable banking including micro credits, savings, loans, insurance, remittances and financial advice.

  • Challenges in Madhya Pradesh

  • Janpad Panchayat Seoni MalwaRRB


    Bank Post Office

    Nationalised Bank

  • Developing MP Model of FILimitations in the present directions of RBI and Ministry of Finance- Speaks about population norm.Paradigm shift- From Population to Geographic distance.Banks/Post Office/Other Financial Institutions taken on board through SLBC.

  • Re Engineered Fund Flow

  • Paradigm shift from Population to Distance

  • Bank-wise Shadow Area Villages

  • Model Ensures Brick and mortar structure of financial point within 5 km.Cleaning of Accounts.Updating of data of beneficiaries of various Social Sector Schemes.Pension schemes based on recurring deposits can be developed under this model.Banks to branch out like granting loans, financial literacy drive, selling of insurance etc.

  • The Service Area Banks have onerous task to reach out through Ultra Small Banks

    The confidence of beneficiary when the banner reflects name of the Bank and is brick and mortar (100sq feet space provided in E-Panchayat Bhavan).

  • State Government facilitatingTo banks to set up Ultra Small Bank.Providing Rent Free Accommodation in each Panchayat.Separate e-Panchayat Room for USB.Fully furnished room with free internet connectivity.

  • Issues with BanksRBI has already agreed for geographical distance approachThe definition of unbanked areasNeed that SLBC approves the list of opening branch in unbanked rural banksSMALL BANK norm as business proposition to be understood by the banks.

  • Issues with Post OfficeOld instruction of post office having account only in District HQ commercial bank: resulting in two months of delayed payments due to late clearance of cheque.The new order to open Account in nearest Commercial Banks to be executed immediatelyNon-Core banking/ComputerizationCash carry limits to be enhanced

  • Issues with UIDUID enables to only identify the individual as declared by him/herBiometrics for payment is the only issueMonitoring requires family data i.e. family to be provided 100days of employmentMP Model propose to use combination of NPR and UID

  • Issues related to MORDThe system of payment through banks in state of MP is 100%.Once account is opened it should be multi-purpose for all the schemes of the Government/Financial Inclusion:- payments, housing subsidy, pensions, fertilizer subsidy, food-subsidy etc.. Along with enabling factor for deposits etc..

  • The Model in ActionCase Study of district.T+3 system an integrated model of ongoing initiatives by various financial institutions.T+3 system for NREGS workers to enable them to received payment within 3 days.Android based facilities to generate e- Pay Orders.

  • Vast Distances in Balaghat District

  • The Model in Action

  • Accounts Status as on September 2012

  • Out comeTime taken for cheque to be credited in GP Account

  • Time taken for Payment to Labour

  • The Smiling Faces

  • The Smiling Faces