It give information about status, problem and prospect of financial inclusion in India.

1. From POVERTY to PROSPERITY
By
Surendra Kumar
Faculty Member
Institute of .Cooperative .Management. Bhopal ( India)

2. 
Scenario In India, almost half the country is unbanked.

Only 55% of the population have deposit accounts and 9
% have credit accounts with banks.

India has the highest number of households (145 million)
excluded from Banking. There was only 1 bank branch
per 16,000 people.

6 lakh villages in India, rural branches of SCBs including
RRBs number 33,495.

contd……

3. 
less than 20% of the population has any kind of life
insurance and 9.6% of the population has non‐life
insurance coverage.

Just 18 % had debit cards and less than 2 percent
had credit cards.
only 45% of the adults in India have access to a
bank account. This figure falls to 27% for rural
households with access to any financial services.
According to RBI statistics, 72% of those earning
less than Rs. 50,000 a year lack a bank account. this
creates a big challenge for banking coverage.

5. No
Savings
No
Assets
No
Insurance
FINANCIAL
EXCLUSION
No
bank
account
No access
to money
advice
No
affordable
credit

6. 








Low income
Nil or low savings
Lack of assets
Unemployment
Psychological &disability issues
Feeling of being excluded
Geographical remoteness
Lack of Information technology
Personal and social factors : Cultural norms,
Gender, Age, Legal identity etc.

7. “ The process of ensuring access to
appropriate financial products and
services needed by vulnerable
groups such as weaker sections
and low income groups at an
affordable cost in a fair and
transparent manner by mainstream
Institutional players.”
The Committee on Financial Inclusion (Chairman: Dr. C. Rangarajan, 2008)

8. 




Absence of Technology
Absence of reach and coverage of Financial
Services.
Poor Delivery Mechanism
Not having a appropriate Business model
Rich have no compassion for poor

9. Year ended
Mar 10
Year ended
Mar 11
1
Banking
Outlets in
Villages –
Branches
33,378
34,811
37,471
40,837
2
Banking
Outlets in
Villages –
BCs
34,174
80,802
141,136
221,341
3
Banking
Outlets in
Villages Other Modes
142
595
3,146
6,276
SR
Particulars
Banking
Year ended Year ended
Mar 12
March 13

10. 










No-Frill Accounts
Overdraft in Saving Bank Accounts
BC / BF Model
KCC / GCC Guidelines
Liberalized branch expansion
Introducing technology products and services Pre-Paid
cards, Mobile Banking etc.
Allowing RRBs’ / Co-operative banks to sell Insurance and
Financial Products
Financial Literacy Program
SHG
Core Banking System (CBS)
National Electronic Funds Transfer (NEFT), National Electronic
Clearing Service (NECS), Immediate Payments Service
(IMPS), Aadhaar Enabled Payment Systems (AEPS) etc

11. 




Transaction cost too high
Appropriate business model yet to evolve
BC model too restrictive
Limitation of cash delivery points
Lack of Interest / Involvement of Big
Technology Players

12. 

Financial Inclusion and Financial Literacy are twin
pillars: Financial Literacy stimulates the demand side –
making people aware of what they can demand.
Financial Inclusion acts from supply side providing
the financial market/services what people demand

13. 







A large population of alphabetically illiterate population requiring basic financial knowledge
A large section of financially excluded population- need to be
told of benefits of financial inclusion and also to be provided
A large growing segment of educated middle class-requiring
financial education
A growing capital market with increasing retail participationrequiring financial education and consumer protection
A growing insurance market with participation of private
players - need consumer protection and financial education
A large section of workers having no pension
A move from Defined Benefit Pension Schemes to Defined
Contribution Pension Schemes
Hence, a large workforce need to be told about riskiness of
various investment portfolios

14. Why Save ?
Why save regularly and consistently ?
Why start saving early in your life ?
Why save with banks ?
Why borrow within Limits ?
Why borrow from banks ?
Why borrow for income generating purposes ?
Why repay loans ?
Why you should keep money aside regularly and
consistently during your earning life for pension in old age
?
What is interest? How moneylenders charge very high
interest rates?











POVERTY to prosperity

15. 
Financial Inclusion is a win-win situation for
the financially excluded, the Corporates, the
Govt. and the Banks. Bankers can support by
financing the Agri products including their
preservation and sales. Corporates can sell /
market their products to the large untapped
rural markets.

16. 
Thank You