Financial Inclusion Department, Head Office, Star House, Mumbai. Financial Inclusion

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1 Financial Inclusion Department, Head Office, Star House, Mumbai. Financial Inclusion 1

2 Financial Inclusion Financial Inclusion is delivery of banking services at an affordable cost to the vast section of disadvantaged and low income group. Financial inclusion also means extending the banking habit among the less privileged in urban and rural India and weaning them away from unorganized money markets and moneylenders. 2

3 Financial Exclusion in India 41% of the population in India is unbanked 40% is unbanked in urban areas 61% is unbanked in rural areas Higher in North Eastern(63%) and Eastern regions (59%) Only 14% of adult population have loan accounts 9.5% in rural areas 14% in urban areas North Eastern(7%) and Eastern regions (8%) (Source RBI) 3

4 Financial Exclusion in India 203 million households in India 147 million households in rural areas 89 million are farmer households 51.4% of farm households have no access to formal or informal sources of credit 73% of farm households have no access to formal sources of credit Share of moneylenders in debt finance has increased (Source RBI) 4

5 Financial Inclusion & Business Prospects Taking Banking Services to the Common Man Through Financial Inclusion Implementation of Unique Identification (UID) coupled with new technologies will expedite the process of financial inclusion in the country 5

6 How Financial Inclusion is useful to Banks Extend reach to unbanked people Increase deposit base through SHGs/villagers Earnings from loan disbursements Help rural India by providing Microcredit Enables Micro Insurance Earnings through money transfers Actively participation in Govt. business like MNREGA scheme pension disbursements etc. 6

7 F I Solution : Features Customer creation No frills Saving Bank Account creation (optional) Cash deposit Cash withdrawal Sourcing of loan application Loan disbursement Loan repayment Balance enquiry Funds transfer Addition of new accounts to the card Mini statement Statement of Account 7

8 Technical Requirements Secure identification and biometric authentication system. Local language enabled voice guided systems. Issue a printed slip as proof of transaction. Should work in harsh and diverse rural environments. Easy integration into existing Core Banking Systems. Save on Branch establishment cost. Should facilitate operation by ordinary villagers through BCs. Doorstep delivery of basic banking services at affordable cost. Ability to extend other services - cross selling. 8

9 Financial Inclusion Methodology 1. Enrolment Process Data Collection System Demographic Details Biometric Details etc. 2. Issuance of Biometric Enabled Multi-Function Card Diverse points of usage Hand-held devices 4. Transaction data loading to Integrated Back-end system & then to CBS 3. Financial Transactions through Field Devices Single Device supports multiple application 9

10 d i gi t a l Financial Inclusion with Smart Card GPRS/GSM/PSTN /CDMA Internet Transactions CUSTOMER Cash deposit Cash withdrawal Loan disbursement Loan repayment Funds transfer* Balance enquiry Mini Statement Addition of new accounts to the card* * Not supported in Offline mode FI Gateway 10

11 Mobile based Financial Inclusion Mobile Telephone proliferated in the country very fast Mobile phones could be used to achieve financial inclusion for large number of population Mobile Device with Biometric Authentication can obviate the need for cards which are High on Cost and Maintenance 11

12 Bank s Financial Inclusion Plan Project tenure 3 years ( ) Opening of 125 lac no-frill accounts in next three years (inclusive of lac no frill accounts in urban area) Provision of inbuilt Overdraft in all the no-frill accounts Entrepreneurship credit to 67 lac households through credit products like KCC/GCC etc. 40,000 villages to be covered out of which villages to be covered by March

13 ICT enabled Solution Smart Cards and Mobile based solution Multiple vendors Opex Model 13

14 Progress made so far Technology enablement Three IT Vendors TCS, HCL and Integra for Smart Card based solution Integra for Mobile based solution PILOT done initially with HCL (Ranchi and Thane) & TCS (Bhagalpur and Khandwa) 14

15 Progress made so far : Manpower deployment Appointment of additional Agricultural Officers devoted specially to the implementation of Financial Inclusion Plan 104 Channel Management Partners (CMPs & TCMPs) appointed across the Zones 6072 no of Business Correspondents engaged upto

16 Progress made so far : Progress under FI: lac No Frilled accounts opened upto March 2014 In-built Overdraft facility linked in lac Smart Cards issued upto March 2014 GCC/ KCC issued in lac accounts villages covered upto BCAs engaged upto

17 Coverage of villages ( ) Villages above 2000 pop. allocated to us : 4404 Population in these villages : lac Villages covered by us through BC outlets : 2,741 Villages covered by branches : 1,663 % Coverage (in villages >2000 pop) : 100% No. of Villages below 2000 pop n to be covered : 35,756 Villages covered by us through BC outlets : 9,553 Villages covered by branches : 103 Total Villages covered either by BCs/Br. : 14,060 No of villages to be covered by the Bank upto2016: 40,160 No of USBs opened (in >2000 pop) :

18 RSETIs RSETIs/FLCC Total no of RSETIs : 43 No of Programmes conducted : 2047 No of people trained : No of persons credit linked : FLCC No. of Centres : 54 No. of camps organised : 394 No. of people educated : Out of above, converted into customers :

19 UID Enrollment Integration with UID project for AEPS And APBS transactions Total Aadhaar 320 lacs enrollment done for resident Indian 19

20 Direct Benefit Transfer (DBT) Parameter Phase I (43 districts) Phase II (78 districts) Rs in Crore Lead Districts (Total 15 BOI Lead Distt out of total 121 Pilot Districts ) BC deployment (iii) (i) Wardha in Maharashtra (ii) Khandwa in MP Ramgarh (iv) Ranchi (v) Hazaribagh (vi) Sareikala Kharsawan in Jharkhand (vii) Mumbai City (viii) Mumbai Sub (i) (v) Ratnagiri (ii) Gondia in Maharashtra (iii) Bhopal (iv) Burhanpur in MP Khunti (vi) Lohardaga (vii) Bokaro in Jharkhand No of villages No of Gram Panchayat No of sub service area Branches at GP centres BC requirement BCs engaged Gap in BC engagement NIL NIL ATM position No of Branches (Total-1136) Onsite ATMs 520 (out of which 164 deployed after ) 511 (out of which 366 deployed after ) Gap (Total-105) 20

21 DBT Parameter Phase I (43 districts) Phase II (78 districts) Rs in Crore Beneficiary list and account opening BOI lead districts (all banks) List of beneficiaries received (Total P & II ) Accounts opened (Total P I &II ) Debit Cards issued (Total P I &II ) Beneficiary received with Aadhaar no (Total P I &II ) Aadhaar seeded and available at NPCI (Total P I &II ) Mapper Beneficiary list and account opening BOI lead districts (all banks) List of beneficiaries received (Total P & II ) Accounts opened (Total P I &II ) Debit Cards issued (Total P I &II ) Beneficiary received with Aadhaar no (Total P I &II ) Aadhaar seeded and available at Mapper NPCI (Total P I &II ) 21

22 Direct Benefit Transfer LPG (DBTL) No of pilot districts in all Six phases Total 293 districts. 20- in1 st phase, 34 in 2 nd phase, 43 in 3 rd Phase, 39in 4 th Phase, 49 in 5 th phase & 108 in 6 th phase BOI Lead districts 38 BOI lead districts involved in all phases. 02 in 1 St Phase, 01 in 2 nd phase,12 in 3 rd phase, 06 in 4 th phase, 05 in 5 th phase and 12 in 6 th phase. 22