MBA Final Year Project on Financial Inclusion

PROJECT REPORT ON

“AN ASSESSMENT OF RECENT INITIATIVES TAKEN FOR

BANKING THE UNBANKED (NAGPUR DISTRICT)”

SUBMITTED TO

RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY,

NAGPUR

FOR THE PARTIAL FULFILLMENT OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SPECIALIZATION

FINANCIAL MANAGEMENT

SUBMITTED BY

MUHAMMAD MEHDI

MBA (II Year)

2014-2015

UNDER THE GUIDANCE OF

PROF. SHIVAJI S. DHAWAD

CENTRAL INSTITUTE OF BUSINESS MANAGEMENT

RESEARCH AND DEVELOPMENT, PAWANBHOOMI, NAGPUR

2

ACKNOWLEDGEMENT

It is true that I have taken efforts in this project. However, it would not

have been possible without the kind support and help of many individuals and

organizations. I would like to extend my sincere thanks to all of them.

I am highly indebted to "PROFESSOR M. I. RAHIM KHAYYAM"

and "PROFESSOR SHIVAJI S. DHAWAD" for their guidance and constant

supervision as well as for providing necessary information regarding the project

& also for their support in completing the project.

I would like to express my gratitude towards my parents & member of

"CENTRAL INSTITUTE OF BUSINESS MANAGEMENT RESEARCH

AND DEVELOPMENT COLLEGE, NAGPUR"for their kind co-operation

and encouragement which help me in completion of this project.

I would like to express my special gratitude and thanks to Lead Bank i.e.

"BANK OF INDIA" and Lead District Manager of the same for Financial

inclusion "MR. MOHAN B. MASHANKAR" for giving me such attention

and time.

My thanks and appreciations also go to my colleague in developing the

project and people who have willingly helped me out with their abilities

specially "DR. SUKHBIR KAUR", for suggesting such a wonderful topic and

helping throughout the project preparation.

Place: Nagpur MUHAMMAD MEHDI

Date: 30-03-2015 Name & Sign of Student

3

DECLARATION

I, the undersigned (MUHAMMAD MEHDI) honestly declare that, this

Project Report entitled “AN ASSESSMENT OF RECENT INITIATIVES

TAKEN FOR BANKING THE UNBANKED (NAGPUR DISTRICT)” is a

genuine and bonafide project prepared by me in partial fulfilment of degree of

"MASTER OF BUSINESS ADMINISTRATION" of "RASHTRASANT

TUKDOJI MAHARAJ NAGPUR UNIVERSITY, NAGPUR".

The Project work is original and the conclusions drawn herein are based

on the data collected and analyzed by me.

To the best of my knowledge, the matter presented in this project has not

been submitted and awarded for any degree, diploma or membership either to

this or any other Institute or University.

Place: Nagpur MUHAMMAD MEHDI

Date: 30-03-2015 Name & Sign of Student

4

CERTIFICATE

This is to certify that the project entitled, “AN ASSESSMENT OF

RECENT INITIATIVES TAKEN FOR BANKING THE UNBANKED

(NAGPUR DISTRICT)” submitted by "MUHAMMAD MEHDI GHULAM

HASNAIN" in partial fulfilment of the requirements for the award of

"MASTER OF BUSINESS ADMINISTRATION" in "FINANCIAL

MANAGEMENT" at the "CENTRAL INSTITUTE OF BUSINESS

MANAGEMENT RESEARCH AND DEVELOPMENT,

PAWANBHOOMI, NAGPUR" is an authentic work carried out by him under

my supervision and guidance.

To the best of my knowledge, the matter embodied in the project has not

been submitted to any other University / Institute for the award of any Degree or

Diploma.

Place: Nagpur

Date: 30-03-2015

Signatures: Guides

DR. AMISHI ARORA PROF. SHIVAJI S. DHAWAD

Director

CIBMRD College PROF. M. I. RAHIM KHAYYAM

5

INDEX

Chapter Particulars Page No.

List of Figures 06

List of Appendix 06

Acronyms Used 07

01. Introduction

Financial Inclusion

Facts & Figures (India & Nagpur)

Brief about Initiatives

08

02. About Study

Objectives of the Study

Limitations of the Study

Importance of the Study

15

03. Review of Literature 17

04. Research Methodology

Data Collection (Primary & Secondary Method)

Sample Size & Selection

Sample Area (Nagpur District)

Sample Period

Assessment Indicators/ tools

20

05. Data Presentation, Interpretation & Analysis

Banking Scenario of Nagpur District

Branch Penetration in Nagpur District

Swabhimaan (Targeted & Implemented)

Extended Swabhimaan (Targeted & Implemented)

PMJDY (Targeted & Implemented)

Coverage under different initiatives

25

06. Findings & Conclusion 36

07. Suggestions 39

Bibliography 41

Appendix 43

6

List of Figures

Sr. No Particulars

1 Definition of Financial Inclusion

2 Nagpur District in CRISIL Inclusix

3 Financial Inclusion Initiatives

4 Brief Description of financial Inclusion Initiatives

5 List of Banks operating in Nagpur District

6 Nagpur at a Glance

7 Bank Branches in Nagpur District

8 Shares of Different Banks

9 Facts regarding Nagpur District

10 Branch Penetration

11 Targeted Villages Population > 2000

12 Achieved Results Under Swabhimaan

13 Allotted villages under Extended Swabhimaan

14 Achieved Result under Extended Swabhimaan

15 Household under PMJDY Mission

16 Total Coverage Under Different Initiatives

17 Difference between Swabhimaan & PMJDY

List of Appendix

Sr. No. Particulars

1 Questionnaire to LDM

2 Swabhimaan Vision document

3 PMJDY Frequently Asked Questions

7

List of Acronyms

Particulars

FI Financial Inclusion

GOI Government of India

RBI Reserve Bank of India

PMJDY Pradhan Mnatri Jan Dhan Yojana

Popul. Population

LDM Lead District Manager

BC Business Correspondent

BF Business Facilitator

PSB Public Sector Banks

Pvt. Private Sector Banks

COOP Co-Operative Banks

RRB Regional Rural Banks

BA Business Associate

BOI Bank of India

SBI State Bank of India

BOM Bank of Maharashtra

SLBC State Level Banker's Committee

LB Lead Bank

Nagpur (R) Nagpur (Rural)

Nagpur (U) Nagpur (Urban)

CBI Central Bank of India

IP India Post

KYC Know your Customer

E- Banking Electronic Banking

8

9

Introduction:

Finance is very essential for every economic activity. Without adequate finance no

activity can be undertaken. Finance is also required by the every section of the society. But

from the beginning of the civilization, only the financial needs of the upper section of the

society were catered. Access to finance by the poor and weaker groups is very difficult. This

is due to the various reasons such as lack of banking facilities for this section, unawareness

about the schemes available for them, lack of a regular or substantial income etc. Moreover,

banks also give more importance to meeting their financial targets. So they focus on larger

accounts. It is not profitable for banks to provide small loans and make a profit. Hence, the

need for financial inclusion is felt.

In regards with this need, the concept of Financial Inclusion is not a new one and it

has become a catchphrase now and has attracted the global attention in the recent past. Lack

of accessible, affordable and appropriate financial services has always been a global problem.

It is estimated that about 2.9 billion people around the world do not have access to formal

sources of banking and financial services. In India a significant proportion of our 6,50,000

odd villages does not have a single bank branch to boast of, leaving swathes of the rural

population in financial exclusion. RBI has reported that the financial exclusion in India leads

to the loss of GDP to the extent of one per cent. (RBI, Working Paper Series (DEPR):

8/2011)

Financial Inclusion Defined

In simple terms, Financial Inclusion means ensuring that the poorest of poor, the most

disadvantaged sections of society, those living in the remotest corners of the country—all

these have free access to formal financial services, be they loans, deposits, payments,

insurance or pensions. And these services should be available at an affordable cost.

The Rangarajan Committee (2008) defines it as

"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". (Report of the Rangrajan Committee on Financial Inclusion)

10

According to the Planning Commission (2009)

" Financial inclusion refers to universal access to a wide range of financial services at

a reasonable cost. These include not only banking products but also other financial services

such as insurance and equity products".

According to Chakraborty (2011)

"Financial inclusion is the process of ensuring access to appropriate financial products

and services needed by all sections of society including vulnerable groups such as weaker

sections and low income groups at an affordable cost in a fair and transparent manner by

mainstream institutional players".

Figure 01. Definition of Financial Inclusion

11

As someone put it simply but beautifully, it is ensuring financial access to those at the

bottom of the pyramid, in the deepest of geographies, at the last mile stone, in the remotest of

the country’s corners, in the most unreachable of villages, across un-travelled roads and

across the most underprivileged of social segments.

Objectives of Financial Inclusion

1. Extending formal banking system among less privileged in urban and rural India.

2. Saving them from unorganized money markets and moneylenders.

3. Equipping them with the confidence to make informed financial decisions.

Facts & Figures

India is place of the largest unbanked population where, only 35 percent adults having

an account in financial institutions which shows that percentage of account penetration in

India just below rest of the developing world. About 50 percent of adults reports in Andhra

Pradesh and Delhi NCR and 40 percent in Gujarat, Kerala, and Maharashtra having a formal

account but Bihar, Orissa, and Rajasthan reports less than 30 percent account penetration.

As per data available from Census 2011, India is having population of around 1.22

billion and 65 per cent of adults across the country are excluded from the formal financial

system.

As per the report of World Bank, In India, only 35.2 percent adults above the age of

15 years have an account at formal financial institutions. 55 percent population has deposit

accounts and only 9 percent population have credit accounts with formal financial

institutions.

Reports show that there is one bank branch per 14,000 persons. Just 18 percent are

debit card holders and less than 2 percent are credit cards holders.

12

In India, despite expansion of bank branches post reform period, the total branches of

commercial banks including RRB‟s and SCB‟s has still stood only 48000 in a country to

provide service to 6 lakh villages. So there is only one bank branch over the 12.5 villages.

As per CRISIL Inclusix Results, CRISIL Inclusix at an all-India level stood at a relatively

low level of 40.1 for 2011 (on a scale of 100). In 2011, the all-India index level did improve

marginally (from 37.6 for 2010), indicating progress on financial inclusion goals.

Nagpur District according to CRISIL Inclusix

Particulars 2009 2010 2011 2012

CRISIL Inclusix Scores

(in terms of Branch, Credit &

Accounts Penetration)

36.9 39.1 44.2 48.5

CRISIL Inclusix Rank

(Total 638 Districts)

213 216 195 178

Figure 02. Nagpur District in CRISIL Inclusix

Brief about Initiatives:

In India, various measures taken by banks, GOI and RBI for financial inclusion plan.

Following figure highlights financial inclusion approaches under various heads,

13

Figure 03. Financial Inclusion Initiatives

To understand about the steps that are taken from Government of India and Reserve

Bank of India and various public and private sector banks, this figure will explain in brief

under different heads.

Initiatives Particulars

Government

Initiatives

Nationalization of Banks in 1969

Swabhimaan in 2010, then it was extended in 2012

Pradhan Mantri Jan Dhan Yojana at 28 August 2014

Various Schemes like National Rural Livelihood Mission,

National Urban Livelihood Mission

Changes in Approach (From Village covering to Household

Coverage)

14

Regulator Led

Initiatives

Lead Bank Scheme in 1969

Simplification in KYC Norms (Various notifications last one is E-

KYC)

Simplification in Branch Authorization norms in 2012

AADHAR as proof of Identity and Address both

Bank Led

Initiatives

Business Correspondent Model

Individual and Not for Profit Organizations in 2006

SHG - Bank Linkage

Inclusion of For Profit Organizations in 2009

Micro Finance institutions - Bank Linkage

Inclusion of Non Banking Financial Companies in 2014

Decisions Regarding Radius ( to increase outreach)

Ultra Small Branches (USB) to remove deficiencies of BC/BFs

Product Led

Initiatives

No Frills Account in 2005

Kisan Credit Card (KCC) for Farmers

General Purpose Credit Cards (GCC) for Rural, Semi Urban and

Urban non Farmers in 2013

Basic Saving Bank Deposit Accounts in 2012

Insurance Facility (Under PMJDY)

Rupay Debit Card (Under PMJDY)

Overdraft Facility (Under PMJDY)

Technology

Based Initiatives

Mobile Banking in 2008

Web Kiosk

Direct Benefit Transfer in 2011

PAHEL in 2015

Initiatives Financial Stability and Development Council (FSDC) in 2008

Financial Literacy and Credit Council Centre (FLCC) in 2012

Figure 04. Brief Description of financial Inclusion Initiatives

15

16

Objectives of the study

To find out the meaning of financial inclusion.

To highlight Central Government and Reserve bank of India’s initiatives to achieve

financial inclusion and its policy structure.

To explore financial inclusion scenario particularly in Nagpur District.

To assess the level of implementation in Nagpur District of recent initiatives

(Swabhimaan and PMJDY).

To study various challenges faced by banks in implementing financial inclusion

Limitation of the study

The study will be limited to Nagpur District only.

The study will be conducted for a limited time frame.

The result of the study will depend totally on information collected through survey,

from the lead bank manager and different banks.

In spite of these limitations, an honest attempt has been made to arrive at fairly objective

conclusions.

Importance of the Study

With the progress of the Indian economy, especially when the focus is on the

achievement of sustainable development, there must be an attempt to include maximum

number of participation from all the sections of the society thus assessing those initiatives

which are taken in this regard also important.

The concept of examining financial access became important immediately after the

All-India Rural Credit Survey that was completed in the 1950s. The results of the survey

revealed that farmers relied heavily on money-lenders in the year 1951-52. and that patterns

continues till now.

17

18

Review of Literature

"Financial Inclusion in India – A Review of Initiatives and Achievements" by

Sonu Garg and Dr. Parul Agarwal which was published in IOSR Journal of Business and

Management (IOSR-JBM), Volume 16, Issue 6. Ver. I (Jun. 2014), PP 52-61.

In this paper, the researcher attempts to understand financial inclusion and its

importance for overall development of society and Nation’s economy. And this study also

focuses on approaches adopted by various Indian banks towards achieving the ultimate goal

of financial inclusion for inclusive growth in India.

“Financial Inclusion And Banks – Issues And Perspectives” is an Address by Dr.

K C Chakrabarty, (Deputy Governor of the Reserve Bank of India), at The Federation of

Indian Chambers of Commerce & Industry (FICCI) Seminar.

The paper states the policy measures of financial inclusion by Reserve Bank of India

and its effectiveness throughout the years. It also states about the challenges which are going

to face in the near future by banks.

"Measuring Financial Inclusion: Explaining Variation in Use of Financial

Services across and within Countries "by Asli Demirguc-kunt and Leora Klapper in Findex

notes ; no. 8., The World Bank,2013,1-6.

This paper summarizes the first publicly available, user-side data set of indicators that

measure how adults in 148 countries save, borrow, make payments, and manage risk. It uses

the data to benchmark financial inclusion in countries around the world, and to investigate the

significant country- and individual-level variation in how adults use formal and informal

financial systems to manage their day-to-day finances and plan for the future.

"Role of Banks In promoting Financial Inclusion In India" by Shahana Khan

which was published in ASM's International E-Journal of Ongoing Research in Management

and IT.

This paper examines the level of financial inclusion achieved by banks in India in

India. It is found that in spite of various efforts by the government financial inclusion has still

remained a distant reality.

19

"CRISIL Inclusix" an initiative developed by CRISIL with support from Ministry of

Finance, Government of India and Reserve Bank of India published at June 2013.

It is an index to measure India's progress on Financial Inclusion. CRISIL Inclusix is

India’s first comprehensive measure of financial inclusion in the form of an index. It is a

relative index that has a scale of 0 to 100, and combines three very critical parameters of

basic banking services

Branch Penetration (BP),

Deposit Penetration (DP),

Credit Penetration (CP) together into one single metric.

CRISIL evaluates financial inclusion at the national, state, district level vis-à-vis a

defined ideal. A CRISIL Inclusix score of 100 indicates the ideal state for each of the three

parameters.

20

21

Sample Size & Selection

All the banks (Public, Private and Regional) which are responsible for the

implementation of Swabhimaan and Pradhan Mantri Jan Dhan Yojana (PMJDY) in Nagpur

District, (22 PSBs and 7 Pvt. and 3 RRB) as allotted by SLBC Maharashtra and they are:

Public Sector Banks

1 Allahabad Bank

2 Andhra Bank

3 Bank of Baroda

4 Bank of India

5 Bank of Maharashtra

6 Canara Bank

7 Central Bank of India

8 Corporation Bank

9 Dena Bank

10 IDBI Bank

11 Indian Bank

12 Indian Overseas Bank

13 Oriental Bank of Commerce

14 Punjab & Sind Bank

15 Punjab National Bank

16 State Bank of Hyderabad

17 State Bank of India

18 Syndicate Bank

19 UCO Bank

20 Union Bank of India

21 United Bank of India

22 Vijaya Bank

Private Sector Banks

1 Axis Bank

2 Federal Bank

3 HDFC Bank

22

4 ICICI Bank

5 ING Vysya Bank

6 Karnataka Bank Ltd.

7 Ratnakar Bank

Regional Rural Banks

1 Maharashtra Gramin Bank

2 Vidarbha Kshetriya Gramin Bank

3 Wainganga Krishna Gramin Bank

Figure 05. List of Banks operating in Nagpur District

Sample Period

1. Till 31th March 2011 ( Before implementation of Swabhimaan)

2. From April 2011 to March 2012 (Under Swabhimaan period).

3. From April 2012 to 27th August 2014 (Under Extended Swabhimaan period)

4. From 28th August 2014 to 26th January 2015 (Under PMJDY Period).

Assessment Tools

All analysis is done by using basic mathematical terminologies.

23

Sample Area (Nagpur District)

Nagpur district is one of the nine districts of Vidarbha Region of Maharashtra State. It

is situated on the eastern part of the State. It is bounded by Wardha and Amravati districts in

the west, Bhandara district in the east and Chandrapur district in the south. The district

headquarters is located at Nagpur Town

Geographical Area: 9897 Sq. Km.

Total Population: 46,53,171 (As per Census 2011)

Administrative Divisions: 14

Total Villages: 1658

Nagpur at a Glance:

Name of Tahsils No. of Villages No. of Households Sum of Population

Bhiwapur 109 19990 81519

Hingna 133 58928 242198

Kalameshwar 100 28573 122363

Kamptee 78 50307 238870

Katol 164 37710 163808

Kuhi 151 28791 123977

Mauda 119 31730 139776

Nagpur (Rural) 146 70781 302195

Nagpur (Urban) 1 527634 2405665

Narkhed 130 34398 147907

Parseoni 110 30605 143019

Ramtek 147 35249 158643

Savner 130 51327 229450

Umred 140 35521 154180

Grand Total 1658 1041544 4653570

Figure 06. Nagpur at a Glance

24

Data Collection

Primary Method

District Lead Banks (Bank of India) for overall allotted villages or households, It's

implementation level through all banks (PSU, RRB and Co-operative societies)

State SLBC Convener (Bank of Maharashtra)

Lead District Manager and Business Associates of lead bank to find out challenges

faced while achieving the target.

Secondary Method

Websites

Global Findex of World Bank

Ministry of Finance ( Department of Financial Services)

Reserve Bank of India

Pradhan Mantri Jan Dhan Yojana

Bank of Maharashtra (SLBC Convener)

Bank of India ( Lead Bank)

Nagpur District Collector Office

Research Papers

Journals

25

26

1) Nagpur Banking Scenario:

Bank Branches In Nagpur District

Public Sector Banks 383

Pvt. Sector Banks 46

Regional Rural Banks 9

Co-Operative Banks 86

Grand Total 524

Figure 07. Bank Branches in Nagpur District

Figure 08. Shares of Different Banks

27

Data Interpretation

Public Sector Banks Have the Highest Share in Nagpur District Banking.

Only one RRB was allotted financial inclusion initiative in Nagpur District

The share of cooperative society bank is second highest after bublic sector banks in

Nagpur District.

2) Branch Penetration in Nagpur District

Nagpur District Total Tahsil 14

Total Village 1,658

Total Population 46,53,171

Total Household 10,41,544

Total Area 9,897

Figure 09. Facts regarding Nagpur District

From the above data, we can calculate these which are describes in the following table.

Branch Penetration

Area Wise 19 Sq. Km per Branch

Tahsil Wise 37 per Tahsil

Population Wise 8,880 per Branch

Household Wise 1,988 per Branch

Village Wise 3 per Branch

Figure 10. Branch Penetration

28

Data Interpretation:

In Nagpur District, there is only one branch to cover the 19 Sq. Km. Area.

In every Tahsil of Nagpur District, there is 37 Branches of Banks.

For three villages of villages of Nagpur District, there is only one branch.

On an average one branch is doing business of 1988 households.

3) Swabhimaan

Reserve Bank of India on the basis of recommendations of High Level Committee on

Lead Bank Scheme directed lead banks to draw a road map by March 2010 to provide

banking services through a banking outlet in every village having a population of over 2000,

and further stated that such banking services may not necessarily be through a brick and

mortar branch but can be provided through any of the various forms of ICT-based

models with the help of hand held machines, smart card & Business Correspondents, this

initiative is called Swabhimaan.

In Maharashtra State As per census 2001, there are 7312 villages in the state having

population above 2000, of which 4292 villages have been identified as unbanked in the state.

Out of which, in Nagpur District number of villages having population above 2000 was 127,

total 65 of them were banked so 62 villages were identified as unbanked villages. Following

table illustrate about these villages along with the population and to whom it is allotted

Targeted Villages Population > 2000

Sr. No. Block Village Bank Population

1 Bhiwapur Tas BOI 2011

2 Hingna Sawangi (devali) BOM 2172

3 Hingna Wagdara Allahabad bank 2603

4 Hingna Isasani UCO Bank 4033

5 Hingna Waddhamana BOI 4174

29

6 Hingna Nagalwadi BOI 4245

7 Hingna Turkmari Allahabad bank 4687

8 Hingna Raipur UCO Bank 7809

9 Kalmeshwar Ghorad BOI 2616

10 Kalmeshwar Ubali BOI 2751

11 Kalmeshwar Bamhni BOI 8400

12 Kamptee Mahalgaon CBI 2309

13 Kamptee Ajani BOI 2439

14 Kamptee Ranala BOI 2509

15 Kamptee Bina SBI 3269

16 Katol Kohali UCO Bank 2307

17 Katol Ridhora SBI 3642

18 Kuhi Silli BOM 2100

19 Mouda Mohadi SBI 2008

20 Mouda Gowari SBI 2035

21 Mouda Dahegaon BOB 2284

22 Mouda Marodi BOB 2314

23 Mouda Niharwani BOB 2434

24 Mouda Mathani BOB 2534

25 Mouda Chirwha SBI 2646

26 Mouda Rewaral BOM 3096

27 Nagpur Ruikhairi BOI 2124

28 Nagpur Khadgaon Syndicate Bank 2133

29 Nagpur Kharabi SBI 2284

30 Nagpur Shiwa BOI 2519

31 Nagpur Linga BOI 2699

32 Nagpur Lava Syndicate Bank 3634

33 Nagpur Rengapar BOI 3843

34 Nagpur Borkhedi Allahabad bank 4675

35 Nagpur Bhokara IDBI 4704

36 Nagpur Narsala SBI 5127

37 Narkhed Rohana BOI 2034

38 Narkhed Mendhala SBI 2154

30

39 Narkhed Kharsoli SBI 2543

40 Narkhed Khairgaon BOI 4932

41 Narkhed Belona BOI 5895

42 Parseoni Juni Kamptee Indian bank 2062

43 Parseoni Naikund SBI 2356

44 Parseoni Karanbhad SBI 2526

45 Parseoni Sihora SBI 3896

46 Ramtek Khairi Syndicate Bank 2055

47 Ramtek Bhondewada BOI 2402

48 Ramtek Kachurwahi SBI 2623

49 Ramtek Patgowari Syndicate Bank 3504

50 Savner Khairi (Dhalgaon) BOI 2031

51 Savner Takali BOI 2147

52 Savner Malegaon BOI 2213

53 Savner Pota UCO Bank 2215

54 Savner Mangsa SBI 2268

55 Savner Umari (Bharatpur) BOM 2507

56 Savner Wakodi Dena bank 3380

57 Savner Dahegaon ( Rangari) SBI 3754

58 Savner Pipla (da-b) SBI 4258

59 Savner Wagoda BOI 5811

60 Savner Bhanegaon Dena bank 6003

61 Savner Chandkapur UCO Bank 9485

62 Umrer Wayagaon (rt) SBI 3848

Figure 11. Targeted Villages Population > 2000

31

Achieved Result:

Villages Population > 2000

Bank No. of Allotted Covered Villages (BR + BC) % of Coverage

Allahabad Bank 3 3 100%

Bank of Baroda 4 4 100%

Bank of India 20 20 100%

Bank of Maharashtra 4 4 100%

Central Bank of India 1 1 100%

Dena Bank 2 2 100%

IDBI Bank 1 1 100%

Indian Bank 1 1 100%

State Bank of India 17 17 100%

Syndicate Bank 4 4 100%

UCO Bank 5 5 100%

Grand Total 62 62 100%

Figure 12. Achieved Results Under Swabhimaan

Data Interpretation:

Out of 127 villages having above the population of 2000 (As per Census 2001), 65

Villages were already Banked before the initiation of Swabhimaan. In the span of one years

remaining 62 villages were equipped with financial access and services.

4) Extended Swabhimaan

From the success of Swabhimaan (the villages above 2000 population, government of

India decided to extend the initiative to villages below the population of 2000 as per 2001

Census. Details regarding that is illustrated in the following table.

32

Villages < 2000 Population

Sr. No. Banks No. of Allotted Village

1 Allahabad Bank 47

2 Andhra Bank 2

3 Bank of Baroda 48

4 Bank of India 598

5 Bank of Maharashtra 165

6 Canara Bank 2

7 Central Bank of India 63

8 Dena Bank 42

9 IDBI Bank 28

10 Indian Bank 3

11 Punjab National Bank 40

12 State Bank of India 263

13 Syndicate Bank 11

14 UCO Bank 91

15 Union Bank of India 70

16 ICICI Bank 12

17 Vidarbha Konkan Gramin Bank 8

Total 1493

Figure 13. Allotted villages under Extended Swabhimaan

Achieved Result

Villages < 2000 Population

Banks No. of Allotted Village Achieved % of Achievement

Allahabad Bank 47 10 21.3%

Andhra Bank 2 2 100.0%

Bank of Baroda 48 48 100.0%

Bank of India 598 598 100.0%

33

Bank of Maharashtra 165 19 11.5%

Canara Bank 2 2 100.0%

Central Bank of India 63 63 100.0%

Dena Bank 42 42 100.0%

IDBI Bank 28 28 100.0%

Indian Bank 3 3 100.0%

Punjab National Bank 40 40 100.0%

State Bank of India 263 263 100.0%

Syndicate Bank 11 11 100.0%

UCO Bank 91 91 100.0%

Union Bank of India 70 7 10.0%

ICICI Bank 12 10 83.3%

Vidarbha Konkan Gramin Bank 8 5 62.5%

Total 1493 1242 83.2%

Figure 14. Achieved Result under Extended Swabhimaan

Data Interpretation

In extended Swabhimaan, villages which are having the population between 1600 to

2000 were identified and targeted by the different banks as per allotment of SLBC

Maharashtra. In the extended Swabhimaan period, the target which is achieves is 83.2 %., it

means till now 251 villages are not having any model of reaching to the excluded people.

5) PMJDY

As per the estimation of Public Sector Banks (PSBs) including RRBs out of the 13.14

crore rural households which were allocated to them for coverage, about 7.22 crore

households have been covered (5.94 crore uncovered). It is estimated that 6 Crore households

in rural and 1.5 Crore in urban area needs to be covered. so for including the excluded people

34

Prime Minister Narendra Modi with the help of Ministry of Finance, Department of Financial

Services and Reserve bank of India initiated a mission called Pradhan Mantri Jan Dhan

Yojana.

Following table illustrate the schme of financial inclusion in Nagpur Region through

PMJDY.

Household Under PMJDY

Name of Tahsils No. of Villages No. of Households

Bhiwapur 109 19990

Hingna 133 58928

Kalameshwar 100 28573

Kamptee 78 50307

Katol 164 37710

Kuhi 151 28791

Mauda 119 31730

Nagpur (Rural) 146 70781

Nagpur (Urban) 1 527634

Narkhed 130 34398

Parseoni 110 30605

Ramtek 147 35249

Savner 130 51327

Umred 140 35521

Grand Total 1658 1041544

Figure 15. Household under PMJDY Mission

Achieved Result:

According to PMJDY Progress report on the website, the coverage is 100% in Nagpur

District of Maharashtra State.

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6) Total Covered Villages:

Covered Villages

By Swabhimaan 127

By Extended Swabhimaan 1242

By PMJDY 316

Total Villages 1685

Figure 16. Total Coverage Under Different Initiatives

Data Interpretation:

It is observed that, though the PMJDY mission has completed the target of 100

percent achievement but in reality it has covered remaining 316 villages which was left after

Swabhimaan and Extended Swabhimaan initiatives. It may be said that most of the accounts

which are opened in PMJDY initiative already has its own account in banks.

It has been observed that the actual households which is covered under PMJDY

initiative cannot determined because the policy change of government. Earlier it was

covering of villages and it was successful at some extent but this mission was covering of

households and includes those households which are covered by earlier initiatives too.

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Findings:

There are a lot of Initiatives which are taken for banking the banked and some of them

are quite successful.

Out of 127 villages having above the population of 2000 (As per Census 2001), 65

Villages were already Banked before the initiation of Swabhimaan. In the span of two

years remaining 62 villages were equipped with financial access and services.

In extended Swabhimaan, the target which is achieves is 83.2 %., it means till now

251 villages are not having any model of reaching to the excluded people.

According to PMJDY Progress report on the website, the coverage is 100% in Nagpur

District of Maharashtra State.

PMJDY has covered only 316 villages to complete the financial inclusion

achievements.

Public Sector Banks Have the Highest Share in Nagpur District Banking.

The share of cooperative society bank is second highest after public sector banks in

Nagpur District.

Only one RRB was allotted financial inclusion initiative in Nagpur District.

The share of Private sector banks in promoting financial inclusion is less than public

and Co-operative banks.

There is only one branch to cover the 19 Sq. Km. Area of Nagpur District.

In every Tahsil of Nagpur District, there is 37 Branches of Banks.

For three villages of Nagpur District, there is only one branch of bank.

On an average one branch is doing business of 1988 households.

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Differences between Swabhimaan and PMJDY

Sr. No. Swabhimaan PMJDY

1 Villages with population greater than or

lessor than 2000 covered; thus limited

geographical coverage

Focus on household; Sub Service Area

(SSA) for coverage of the whole

country.

2 Only rural Both rural and urban

3 Bank Mitr (Business Correspondent)

was visiting on fixed days only

Fixed point Bank Mitr (Business

Correspondent) in each SSA comprising

of 1000-1500 households (3 to 4 villages

on an average) to visit other villages in

the SSA on fixed days

4 Focus on account opening and large

number of accounts remained dormant

Account opening to be integrated with

DBT, credit, insurance and pension

5 Inter-operability of accounts was not

there

Inter-operability through RuPay Debit

Card, AEPS etc.

6 Cumbersome KYC formalities Simplified KYC/e-KYC in place as per

RBI guidelines

7 No guidelines on the remuneration of

the Bank Mitr (Business

Correspondent). Banks went generally

with Corporate BCs who used to be

least expensive to them

Minimum remuneration of the Bank

Mitr (Business Correspondent) to be

5000/-( Fixed + Variable)

8 No brand visibility of the Programme &

Bank Mitr (Business Correspondent)

Brand visibility for the programme &

Bank Mitr (Business Correspondent)

proposed

9 Providing credit facilities was not

encouraged

OD limit after satisfactory operations /

credit history of 6 months

10 No grievance re-dressal mechanism Grievance redressal at SLBC level in

respective states

Figure 17. Difference between Swabhimaan & PMJDY

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Suggestion

Though the target of covering 100 percent is achieved, but problem is about the

dormancy of account. so there is need of those initiative which will helpful in keeping

operationlisation of accounts opened.

Still there are some scope of expansion in branches so it is suggested that share of

private sector banks can be expanded.

To increase the outreach of banks to the excluded people, there is need of certain

brick and mortar type models and that can be fulfilled by using post offices as a

counter for banks and also railway platform used as fixed location for providing

financial services. it means banks can tie-up with India Post to utilize their extensive

network by setting up small banking counters at each of their post offices, especially

rural branches. The government owned post offices have sufficient space in the post

offices to set up such a counter with a computer and printer, to be operated by a

commercial bank employee. With existing arrangements at the post offices, these can

be converted into extended banking counters.

Financial literacy needs to be given importance in schools education, and student

small saving programs, where bankers visit schools and collect small deposits, need to

be revived.

Methods of financial literacy need to be changed from distributing printed literature to

audio and visual media such as radio and TV programs, especially in local languages.

There is a need to have granular schemes, preferably different schemes for rural and

urban areas, different product for rural and urban citizen of Nagpur District. Further,

distinct schemes and products can be made on the basis of nature of employment of

different people and the village atmosphere.

As discussed with LDM of Nagpur District, it is suggested to increase of individual

village boy as BC or BF instead of Corporate business correspondent or facilitator.

The possibility of appointing house-wives as well as people with limited handicap as

BCs could also be considered as that might reduce the attrition rate and in increasing

the confidence level

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42

Bibliography

1) Research Papers

"Financial inclusion for Banks in India" by Archana V Rao in International Indexed

& Referred Research Journal , ISSN 2250-2556; Volume. I *ISSUE-1, April 2012.

"An Empirical Study of Financial Inclusion and its strategic approach in the slums of

Mumbai" by Ramraj T. Nadar in Indian Journal of Management IT and

Engineering, Volume 3, Issue 2 ISSN: 2249-0558.

"Challenges to financial Inclusion in India: the case of Andhra Pradesh" By S

Ananth, T Sabri Oncu in EPW, Economics and political weekly, February 16,2013.

"Opportunities & Obstacles to financial inclusion" by Prof. Gayathri Band, Dr.

Kanchan Naidu, Ms. Tina Mehadia in Arth Prabhand, A journal of Economics and

Management, Volume 1 Issue 1, April 2012.

"Financial Inclusion in India: an Appraisal" by Reena Malik & Sarika Yadav in

International Journal of Research (IJR) Vol-1, Issue-4, May-2014. ISSN 2348-6848.

"Role of Bank of Maharashtra in Promoting Financial inclusion in India" by Dr.

Sunil Ram Gaikwad in Global Online Electronic International Interdisciplinary

Research Journal (GOEIIRJ) Volume-I, Issue-II October 2012 ISSN: 2278-5639.

"Including the excluded through financial inclusion" by Dr. B. C. M. Patnaik, Dr.

Ipseeta Satpathy, Nageshwar Patnaik, Aroop Kumar Mohapatra in International

Journal of Physical and Social Science, Volume 2 Issue 7, ISSN: 2249-5894.

"Financial Inclusion in India: Challenges and Opportunities" By Ms. Richa

Aggrawal in International Journal of Research (IJR) Vol-1, Issue-4, May 2014. ISSN

2348-6848.

2) Websites

Global Findex of World Bank: www.worldbank.org

Ministry of Finance ( Department of Financial Services): www.finmin.nic.in

Reserve Bank of India: www.rbi.org.in

Pradhan Mantri Jan Dhan Yojana: www.pmjdy.gov.in

Bank of Maharashtra (SLBC Convener): www.bankofmaharashtra.in

Bank of India ( Lead Bank): www.bankofindia.com

Nagpur District Collector Office: www.nagpur.nic.in

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