Study to Identify the Retail Penetration Level of Debit or Credit Cards in Rural Areas.pptx

1. SUBMITTED BY
XXXXXXXXXXXX
MBA
ROLL NO.:-
STUDY TO IDENTIFY THE RETAIL PENETRATION
LEVEL OF DEBIT OR CREDIT CARDS IN RURAL
AREAS

2. INTRODUCTION
In an effort to bring the whole nation into the Digital Age, the government of India is
working to digitize banking in rural regions. A decrease in cash-based crimes may result
from widespread use of cashless transactions in rural areas (e.g., bribes, robbery). Rural
communities benefit from greater security and greater financial independence thanks to the
advent of digital banking. Our study will analyse families' use of the remote banking options
made available to rural regions in the past. In this section, we will examine the differences
between rural communities who lack access to cashless transactions and those that have.
After analysing the data, we want to learn three things: 1) whether or if an initiative to offer
digital banking in remote villages improved residents' usage of digital banking; 2) what
kinds of locations and individuals use the digital banking alternatives; and 3) who has yet to
become digitally banked. We intend to give this data to Indian banks in order to help them
better grasp the digital banking potential available to India's under banked population.

3. CONTI…
The Indian banking sector has always focused on deposit and credit services. Since the
government of India owns the majority of the shares in most of the banks, its mandate was to
promote expansion across the economy. However, the banking sector has also seen considerable
upheaval in the previous five years due to deregulation and the technology revolution. Public
sector banks formerly dominated their market, but they have had to contend with new, younger
private sector banks as well as international firms. The Reserve Bank of India (RBI) has
introduced new regulations in an effort to increase bank transparency and conform Indian banking
to international best practices. The rural population of India makes up the bulk of the country's
GDP. Innovations in banking technology have a disproportionately great impact on India's rural
population because of the country's status as a developing economy. The success of a digital
economy may be predicted in large part by the extent to which people are aware of, and make use
of, a variety of digital financial services. The number of bank branches per capita in India is the
greatest of any country.

4. CONTI…
IFAD sees rural banking as a crucial instrument in combating poverty and fostering growth in
rural areas. The Rural Banking intervention is used in 66 percent of active IFAD programmes.
Small farmers and other producers in low-income, high-variability regions make up the bulk of
IFAD's clientele. Direct access to financial services has been found to improve the income, food
security, and asset development of the rural poor.
In spite of its well-documented and favourable influence on the lives of the rural poor, Rural
Banking should not be seen as a silver bullet for alleviating poverty. Investment in this sector,
along with others, may have a significant influence on poverty reduction, but only when enabling
laws are in place, markets are working, and non-financial services are readily accessible. Income
transfers, safety nets, and enhanced social infrastructure may be more efficient ways to reach the
lowest of the poor and destitute, i.e., those without income.

5. ABOUT BANKING INDUSTRY
The banking system in India is adequately capitalized and regulated, according to the Reserve Bank of India
(RBI). The country's economy and banking system are unparalleled anywhere else in the globe. Research of
credit, market, and liquidity risks shows that Indian banks have been quite robust during the global recession.
Many new payment and small financing bank models have lately entered the Indian banking market. A
reorganization of the domestic banking sector may benefit greatly from the new measures introduced by RBI.
India's Immediate Payment Service (IMPS) is the sole system at level five in the Faster Payments Innovation
Index (FPII), making it the most advanced digital payment system among 25 nations.
The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46 foreign banks, 56
regional rural banks, 1485 urban cooperative banks and 96,000 rural cooperative banks in addition to
cooperative credit institutions As of September 2021, the total number of ATMs in India reached 213,145.
In FY18-FY21, bank assets across sectors increased. Total assets across the banking sector (including public
and private sector banks) increased to US$ 2.48 trillion in FY21.

6. STATEMENT OF THE PROBLEM
Seventy percent or more of India's people call rural regions home. Companies like
Freecharge and Paytm expanded their services into rural India shortly after the 2016
demonetization, while the government responded by launching its own digital payment
systems, such as the BHIM app. A smartphone connected to the internet and a valid
debit or credit cards from a bank are prerequisites for this. Therefore, it is clear that
India's IT infrastructure presents a significant challenge to the success of the Digital
India initiative.
The survey by TRAI found that more than half of all mobile users in India do not have
an active internet connection, making it impossible for them to take use of these digital
solutions.

7. OBJECTIVES OF THE STUDY
 To study the digital banking services by rural banking.
 Examine the Credit Card Industry in terms of its nature, market influences, and current
and predicted developments in rural regions.
 To know the customer awareness regarding credit cards in rural areas.
 To analysis the benefits of debit or credit cards.
 To give a few suggestions to the bank about their debit or credit card services in rural
India.

8. SCOPE OF THE STUDY
As a result of digitization, a robust network has been set up to facilitate the rapid
global distribution of financial services. With the advent of digital banking services,
India has been able to close the gap in financial activity between its rural and urban
regions. Credit and debit cards may be used for a wide variety of transactions. Users
often make purchases of everyday necessities using a credit card. Using a credit card
to make ATM withdrawals is another convenient option for cardholders whose
primary bank account may not have enough funds. Thus, a credit card user may access
credit to withdraw funds in an urgent financial situation. Online retailers accept credit
card payments for products and services. Payments made using debit or credit cards
on e-commerce sites like Snapdeal, Amazon, Flipkart, etc. also qualify for substantial
discounts, which customers in both urban and rural India appreciate.
.

9. METHODOLOGY
Primary Data Collection:
 Interview Method
 Questionnaire Method
Secondary Data Collection:
 Text Books
 Websites
 Company Records

10. RESEARCH METHODOLOGY:
1. Research method : Survey Method
2. Research instruments : A well Structured Questionnaire
3. Source of data : Primary Data and Secondary Data
4. Primary data : Collection of primary data through a structured questionnaire
5. Secondary data : Collected from the text books, company broachers and internet
6. Sample size : 100
7. Sampling unit : Managerial and non-managerial (pertaining to all levels & all
Channels)
8. Sampling procedure : Stratified random selection technique

11. FINDINGS
 84% respondents were male however 16% respondents were female
 28% respondents were from age group of 26-30 years however 42% respondents were from age
group of 31-40 years
 97% respondents were aware of Digital Banking Services however 3% respondents have given
negative response.
 78% respondents were using credit card services while 22% respondents have given negative
response
 80% respondents replied that they depend on CITI for their regular transaction but 15% respondents
replied that they depend on HDFC for their regular transaction.
 77% respondents believe that Private sector bank is most technologically advanced while 23%
respondents respond for Public sector bank.
 42% respondents are using credit card for shopping while15% respondents are using for Money
Transaction.

12. CONTI…
 It was observed that the majority of respondents (90%) opted to use online banking over
their traditional banking system. Therefore, banking through the internet has a very
promising future.
 53%, majority of those who participated in the survey were of the opinion that the
biggest motivating element for a person to utilize online banking is the transparency that
is offered by internet banking. Other motivating aspects included convenience, speed,
and the saving of time.

13. SUGGESTIONS
 Under no circumstances should you hand up your credit card to the firm. Instead,
payment should be made via check.
 Keep an eye on the statements for your credit card.
 You are obligated to promptly notify Micro Forecasts of any unlawful charges and
request that the charges be reversed if they occur. After a few days have passed, contact
the credit card provider to inquire as to whether or not you have been credited. Do not
wait until your next statement to check and see whether the credit has been applied.
 Give Micro Forecasts another call if the money has not been refunded. First and
foremost, you need to dispute the charge as soon as possible with your credit card issuer.

14. CONCLUSIONS
The struggle that banks have in the modern day is more often with cash than with other banks. Because the Indian market has
such a large amount of untapped potential, it is in the best interest of credit card issuers to spread awareness among users about
the advantages of using a credit card. Additionally, the advertisements have to be able to persuade enough people to dispel the
misconception that credit cards encourage more spending. The primary goal should be shifting expenditure that is not associated
with the card to spending that is associated with the card. To keep their customers, credit card issuers need to prioritize customer
care and competitive pricing, and they must acknowledge the significance of the invoicing and payment process.
Instead than focusing on fringe advantages like non-crisis credit or prestige proposal, credit card companies should focus on
meeting the demand of customers for broader acceptance if they want their credit card schemes to be successful. The use of
credit cards for making purchases of a broad range of goods in addition to the use of ATMs should be emphasized, and this
should be supported by a much more extensive network of merchant establishments. The initial one-time subscription charge
must be lowered by the financial institutions in order to attract more customers to become cards.
The financial institutions had to scale up their advertising efforts in order to construct a brand image and generate a greater level
of brand recall comparable to that of Citibank. Because an increasing number of individuals are open to the idea of using credit
cards, financial institutions need to develop creative plans to boost the amount of money spent using cards. Simultaneously, in
order to cater to consumers who have a high net worth and those who have specific demands, banks should create more
premium plastic and CO-cards. These cards should piggyback on the infrastructure that is already in place, but they should
provide users with unique add-ons.

15. BIBLIOGRAPHY
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