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Financial Inclusion for inclusive Growth Taking FI to Last Mile

Presented by :S S BhatChief General ManagerCanara Bank, Head OfficeBengaluru

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Inclusive Growth

Sharing benefits from growth process It is both process & outcome

MEANING MAJOR DRIVERS

Demographic Dividend Greater Domestic & International Competition Increase in total factor productivity

Inequalities in distribution of income &wealth Rapidly growing urban region v/s stagnant Rural region 29% are still under poverty line

CHALLENGES

Financial Inclusion initiatives Financial Literacy Social Security Schemes Projects creating job opportunities

SOLUTIONS

REQUIREMENTS

RESOLVE

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Evolution of Financial Inclusion

Rural Branch Expansion / Service Area

Bank Nationalisation

Financial Inclusion Plan/

PMJDY

Financial InclusionEvolution Introduction of

Lead Bank SchemePriority Credit/ Govt

Schemes/ SHGs/ Creation of NABARD

Establishment of RRBs

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Inclusion is meant to provide….

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Financial Inclusion Plan of RBI

From year 2011-13

Aimed at covering villages with more than 2000 population

Brick & mortar branches to be opened in 15% of allotted rest by engaging Banking Correspondent Agents

Opening of no-frills accounts

Extending other banking products

From year 2013-16

To extend Banking facilities to all villages with less than 2000 population

Mandated to open brick & mortar branches in 5% of allotted villages and rest by deploying Banking Correspondent Agents

Opening no-frills accounts in these villages and offering other banking products

Phase II Phase I

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UID

Power of identity

Enhanced access to services

Direct Benefit

Transfers

Preventing Leakage

Eases mobility

Aadhaar – The Game Changer

97 Crore Enrolled 15 Crore seeded to Bank Accounts

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Inclusion in new format

Phase I Universal Access to Banking

Basic Bank A/c with

Rupay Card

Financial Literacy

Phase II

Micro Credit

Micro Insurance

Micro PensionPr

adha

n M

antr

i Jan

Dha

n Yo

jana

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Jan Dhan – pushing ahead InclusionBACKGROUND

Launched during Aug 2014 to provide Banking services at all 6 Lac villages and 1.5 Lac Urban Wards.

Aimed at providing at least one Savings account to each household. Provision to open zero balance a/cs. Financial Literacy at a/c opening camps.

Accounts were bundled with benefits like free Rupay Card, Free Insurance and Loan upto Rs.5000 based on satisfactory conduct of the account for six months. All accounts are extended with mobile banking

STATISTICS

20.72 Crore Savings Bank a/cs have been opened so far.

Banks have mobilized over Rs.32,000 Crore

13.86 Crore Rupay Cards have been issued

Zero Balance a/cs have come down to 31%

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PMJJBY & PMSBY The JAM Trinity Social Pension Offering accidental and life

insurance at a nominal premium of Rs.12 and Rs. 330 per year.

Easy entry, no medical check up.

Persons upto the age of 50 are eligible for Life insurance & Accidental insurance is extended to people upto the age of 70

2.94 Crore lives covered under Life insurance

9.34 Crore covered under Accidental insurance

Three modes of identification to deliver direct benefits to the poor

Mobile penetration in the country is 100 Crore and increasing

Rs.3.78 Lac Crore or 4.2% of GDP is currently spent on key subsidies

Efficient distribution of Government benefits & Elimination of privileged who can afford good standard of living even without government subsidies

Containing the leakage & using such saved funds for other developmental activities

Pension for the unorganised sector

Provides for assured pension of Rs.1000 to Rs.5000

Persons upto the age of 40 are

eligible

Government co-contribution up to Rs.1000 per year

Facility to nominate

Over 20 lac accounts opened so far.

Financial Inclusion for Inclusive Growth

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Shishu - Upto Rs.50,000

Kishor - Upto Rs. 5 Lac

Tarun - Upto Rs.10 Lac

MUDRA Facilitating Inclusive Growth

Rs.84,654 CroreAlready

Disbursed

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DIGITAL INDIA

To make available Government services to all citizens electronically

Broadband in 2 lac villages & universal mobile phone connectivity

4 lac public internet access points

Wi-Fi in 2.5 lac Schools

ICT initiatives for Financial Inclusion

To encourage multinational &domestic companies to manufacture in India

To emerge as top global destination for foreign direct investment

Job creation & skill enhancement in 25 sectors

From Sep 14 to Nov 15, projects worth Rs.1.20 lac Crore received

SCHEMES FOR INCLUSIVE GROWTH

MAKE IN INDIA

Financial Inclusion for Inclusive Growth

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STARTUP INDIA

Promoting Bank finance for Indian Startup Companies

To get rid of Licence Raj & hindrances like land, environmental clearance

Single window clearance with mobile application, Attracted investment of over $10 billion.

Standup India initiative for loans upto Rs.1 Crore for green field enterprises set up by

SC/ST and Women borrowers

To create a hallmark called ‘Rural India Skill’, to standardise training

Course methodology would be innovative, which would include games,

group discussions, brainstorming sessions, practices, case studies etc

Aims at capacity building of 50 Crore youth by 2022

To emerge as the Skill Capital of the world

SCHEMES FOR INCLUSIVE GROWTH

SKILLINGINDIA

Financial Inclusion for Inclusive Growth

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• Introduced Anchor NGO concept during 2012.• MOU with renowned NGO M/s Shri Kshetra Dharmasthala Rural Development Project (SKDRDP).• Implementation at Chitrdurga a backward district, with an aim to form & link 7000 SHGs of economically backward Women.• NGO gets 5% service charge on average monthly outstanding & one time grant assistance of Rs.1000 per group.

Canara Anchor NGO Model for inclusive growth

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14639 WSHGs formed with 1.51 lac members

Increase in Income level of the members from Rs. 125 to Rs.450 per day

14101 WSHGs linked with credit amounting to Rs.487 Crore

Resulted in forming 90 Milk producers Co-op Society in the District

Members opened 10464 Fixed Deposit A/cs amounting to Rs. 13 Cr & RD a/cs with Rs. 45 Lacs

No overdue, No Default 100% Recovery

The Success Story….

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Last Mile Delivery – Real Challenge Huge Population

• 1.27 bn Population

• Urban 31% Rural 69%

• 600,000+ Villages

• Problem of newwork

connectivity & dark areas

Insufficient Bank Branches

1 Bank Branch per 8000 people

1.55 Lakh Post Offices

Predominantly Cash Economy

Large population preferring

Cash transactions over e-tran

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Last Mile – Critical Factors

Available

Accessible

Affordable

Acceptable

Customer-centric Products / Services

Anytime, Neighbourhood Convenience

Should not pinch the Common Man

Non-tech savvy, Cash payment option etc

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Last Mile - Limitations

E-Commerce Narrow home PC base

Internet Users are around 18%

People without Debit Cards and

Un-willing are huge in numbers

M-Commerce Increasing Mobile Subscriber base

• 78% penetration

NPCI – IMPS gaining momentum

131 member Banks

Over 2 Crore Transactions per month

Still huge scope

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Last Mile – the Successful model

1.25 Lac Bank Mitras Serving at Door Step

USSD, the Other Alternative

On normalhandsets

These MicroATMs are

AEPS & RupayEnabled

2.42 CroreIMPS transactions

Happen Every month

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Inclusive Growth should result in….

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WAY FORWARD….

Seamless connectivity to all areas thru Broadband connection

Implementation of Interoperability by all Banks

A/c Portability

Debit Card to every account holder

Technological Integration among Banks

Seeding of Aadhaar in all accounts

Making the Bank Mitra, a viable model

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