Transcript STRATEGY FOR FINANCIAL INCLUSION

FINANCIAL INCLUSION IN INDIA
AND
National Bank for Agriculture
and Rural Development
(NABARD)
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Presentation by Shri U.C. Sarangi, Chairman,
NABARD & Shri S.K.Mitra, Executive
Director, NABARD
History of strategies for Inclusive Growth/
Livelihood improvement/ Financial Inclusion
in India
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Phase I (1960 – 1980)
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Social control of Banks – (1960)
Nationalisation of Banks – (1969)
Setting up of Regional Rural Banks – (1975)
Priority sector lending stipulation by RBI - (1972)
Lead Bank scheme – (1969)
History of strategies for Inclusive Growth/
Livelihood improvement/ Financial Inclusion
in India
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Phase II (1980 – 2005)
 Integrated Rural Development programme/ SGSY
promoted by Govt. Of India
 Microfinance
programme– SHG – Bank linkage
facilitated by NABARD
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Phase III (2005 onwards)
 Development of MFIs
 Financial Inclusion in a “MISSION” mode
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Formal Bank Network In India
Government of India
Reserve Bank of India
NABARD
Public Sector
Banks (28)
Rural
Semi-urban
Urban
Metro
Total
18,197
11,736
10,247
9,726
49,906
RRBs (96)
LABs (4)
Private
Banks (24)
Credit
Cooperatives
11,444 / 5
2,481 / 14
522 / 11
59 / 0
14,506 / 30
987
2,077
2,102
1,901
7,067
SCB – 31
DCCB – 367
PACS – 108779
SCARDB – 20
PCARDB - 727
13,104 NBFCs registered with RBI.
1853 Urban Co-operative banks with 7217 branches.
 Foreign Banks Urban – 43, Semi Urban – 2, Metro – 227. (Total 272)
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NSSO – 2003 Findings of Survey
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51% lack access to Financial Services
from formal system
Exclusion predominant amongst:
-- Poor and weaker sections
-- Resource poor regions
SHG - Photo
Largest Financial Inclusion
programme in the World
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58 million poor households provided access to
banks through 3.48 million SHGs.
Savings of SHGs with banks $ 703 million.
Bank loans availed by SHGs $ 2473 million
NABARD Refinance support $1412 million
NABARD Promotional support $5.5 million
•SHG- Bank Linkage programme in India facilitated by
NABARD, implemented by Banks, NGOs, Government
agencies
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Financial Inclusion - Definition
“The process of ensuring access to
financial services and timely and
adequate credit where needed by
vulnerable groups such as weaker
sections and low income groups at an
affordable cost.”
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Financial Inclusion eventually to
include the following services
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Savings/ Thrift
Loans/ Credit
Remittance / Transfer of Funds
Micro Insurance Services (Life and Non- Life)
Mutual Funds/ Annuity Products
Pension Products
Creation of Funds with NABARD in 2007 08
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Financial Inclusion Fund (FIF) – Rs 5000 million
Financial Inclusion Technology Fund (FITF) – Rs
5000 million
Govt. of India : RBI : NABARD (40:40:20)
Objectives of FIF
The objectives of the FIF shall be to support
“developmental and promotional activities”
with a view to securing greater financial
inclusion, particularly among weaker
sections, low income groups and in
backward regions / hitherto unbanked areas.
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Objectives of FITF
The objectives of the FITF shall be to enhance
investment
in
Information
Communication
Technology (ICT) aimed at promoting financial
inclusion, stimulate the transfer of research and
technology in financial inclusion, increase the
technological absorption capacity of financial service
providers / users and encourage an environment of
innovation and cooperation among stakeholders.
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Technology Solutions being tried in
India
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Smart card, hand held terminal, central
CPU
Low cost ATMs
Mobile Phone Banking
SMS Banking
Public Call Office (PCO) Connectivity.
Way Forward
Targets fixed for each Branch of Commercial
Bank/Regional Rural Bank to :
– Open 250 accounts every year
– Issue 100 Farmers’ Credit Card
– Issue 100 General Credit Card
– Distribute 100 micro insurance policies
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Way Forward (contd/-)
Micro Finance Sector (Development and Regulation) Bill,
2007 under consideration.
 Setting up of Rural Credit Information Bureau.
 Ensuring
effectiveness of Business Facilitator(BF)
/Business Correspondent(BC).
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Micro finance Development and Equity Fund
Micro finance Ombudsman
Regulatory and developmental power to NABARD
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THANK YOU
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