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A Project Report
On
A STUDY ON THE RURAL BANKING BEHAVIOR AMONGSTRURAL HOUSEHOLDS IN KHUTAR. SHAHJHANAPUR
Submitted for partial fulfilment of the requirements for the
award of the degree
Of
BACHELOR O COMMERCE !HONORS"
BY
Mr. HAR#INDER SINGH !$%$&$&&&'$"
Un(er t)e *+,(-nce o
MR. T-r+n G+pt-
ASSISTANT PROESSOR
Dep-rt/ent o M-n-*e/ent
In0ert,1 Un,0er1,t23 B-re,442.
INVERTIS UNIVERSITY3 BAREILLY !U.P."
SESSION 5&$'6$7
CERTIICATE
1
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TO #HOM IT MAY CONCERN
This is to certify that Mr.HAWI!"# SI$H of %.&om 'H()*I semester in our institute has
successfully completed his pro+ect wor, entitled -A study on the rural ban,ing behaiour
amongst rural households in /hutar0Shah+ahanpur .1 for the partial fulfilment of degree of
bachelor of commerce 'honours( for the session 2345)46.
7rof. Arpan /hastgir !r.#achnaSe8enaMr. Tarun $upta
'!irector0 Management( 'HO! %%A9%.&om( 'Assistant 7rof.(
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AKNO#LEDGEMENT
The satiation and euphoric that accompany the successful completion of the tas, would not
be possible without the mention of the people who made it possible. After all0 success is the
epitome of hard wor,0 seerance0 undeterred missionary0 :eal0 steadfast0 determination and
most of all encouraging guidance. So immense gratitude0 I ac,nowledge all those guidance
and encouragement sered as a ;%eacon
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E8ECUTIVE SUMMARY
>inancial inclusion0 the purpose of this study is to understand the status of rural ban,ing
facilities among the rural household in /hutar
>rom a study we can summarise that around ?@ respondents are male haing there ban, account where only 22 female0 on the basis of economic status respondents are classified as
A7< 6B and %7< B?. Among religionwise CD Hindu0 BB Si,h and 4@ Muslims
respondents hae their own ban, account.
Most of the rural household go to the ban, as and when required0 In order to study the
impact of opening ban, account 6@ hae saed after opening of the ban, account and B2
respondent had not saed after ban, account.
In this sampling C@ respondents had said that there credit demand decrease where as 52
respondents had said that there is no impact on credit demand decrease after financialinclusion.
There 4@ respondents borrow credit for the income generation0 B for the business
e8pansion0 23 for the agriculture and allied0 23 for the repay the loan0 4C for the
education0 4? for the health0 B for the assets0 B for the death and other 2 for the
other specify.
In the random sampling CD respondents are between 3 to 50 4B respondents belong to 6 to
430 2B respondent between 44 to 45 and 45 are between4 6 to 23.
In the rural area ',hutar(B respondents are post graduate0 23 respondent are
illiterate042 respondents belongs to primary0 4@ respondents are basic0 2? respondents
are matric0 @ respondents are intermediate and 42 respondents are graduation.
Here 42 respondents sae their money to repay old loan0 43 for inest in business0 4@
respondents sae for education04B for the health05 for the marriage and 22 respondents
sae for the asset0 B for the ulnerability and other 4? for the other specify.
In this sampling C? respondents are farmer0 25 respondents are labourer0 @ respondents
are got. employee0 B respondents are priate emp and 4? respondents are in other
specify.
4
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TABLE O CONTENT
SERIAL
NO9
TITLE9 PAGE NO9
$ CERTIICATE &5
5 ACKNO#LEDGMENT &%
% E8CECUTIVE SUMMARY &:
:. LIST O TABLES &7
'. LIST O IGURES &;
7. CHAPTER $6 INTRODUCTION &
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LIST O TABLES
SERIAL
NO9
TITLE9 PAGE NO9
$. T-?4e. :.$ Gen(er 5:
5. T-?4e .:.5 A*e o -/,42 )e-( 5'
%. T-?4e .:.% M-r,t-4 1t-t+1 57
:. T-?4e .:.: E(+c-t,on o -/,42 )e-( 5;
'. T-?4e .:.' Occ+p-t,on 5<
7. T-?4e .:.7 No o -/,42 /e/?er 5=
;. T-?4e .:.; Econo/,c-4 1t-t+1 %&
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LIST O IGURES
SERIAL
NO9
TITLE PAGE
NO9
$. IG. :.$ G-n(er 5:
5. IG.:.5 A*e o -/,42 )e-( 5'
%. IG .:.% M-r,t-4 1t-t+1 57
:. IG.:.: E(+c-t,on o -/,42 )e-( 5;
'. IG .:.' Occ+p-t,on 5<
7. IG.:.7 No o -/,42 /e/?er 5=
;. IG .:.; Econo/,c-4 1t-t+1 %&
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portfolios0 throughout the day. The ban,ing system in India0 should not only be hassle free
but it should be able to meet the new challenges posed by the technology and any other
e8ternal and internal factors. >or the past three decades0 India=s ban,ing system has seeral
outstanding achieements to its credit. The %an,s are the main participants of the financial
system in India. The %an,ing sector offers seeral facilities and opportunities to their
customers. All the ban,s safeguards the money and aluables and proide loans0 credit0 and
payment serices0 such as chec,ing accounts0 money orders0 and cashier=s cheques. The
ban,s also offer inestment and insurance products. As a ariety of models for cooperation
and integration among finance industries hae emerged0 some of the traditional distinctions
between ban,s0 insurance companies0 and securities firms hae diminished. In spite of these
changes0 ban,s continue to maintain and perform their primary roleEaccepting deposits and
lending funds from these deposits.
The first ban, of limited liability managed by Indians was Oudh &ommercial %an, founded
in 4@@4. 7un+ab ational %an, was established in 4@DC. Swadeshi moement0 which began in
4D360 encouraged the formation of a number of commercial ban,s. %an,ing crisis during
4D4B )4D4? and failure of 5@@ ban,s in arious States during the decade ended 4DCD
underlined the need for regulating and controlling commercial ban,s. The %an,ing
&ompanies Act was passed in >ebruary4DCD0 which was subsequently amended to read as
%an,ing #egulation Act0 4DCD.This Act proided the legal framewor, for regulation of the
ban,ing system by #%I. The largest ban, ) Imperial %an, of India ) was ta,en oer by the
#%I in 4D55 and rechristened as State %an, of India0 followed by inclusion of its ? Associate
%an,s in4D5D. At present S%I has fie associate ban,s. With a iew to bring commercial
ban,s into the mainstream of economic deelopment with definite social obligations and
ob+ecties0 the $oernment issued an ordinance on 4D Fuly 4D6D acquiring ownership and
control of 4C ma+or ban,s in the country. Si8 more commercial ban,s were nationalised from
45 April 4D@3.
Meaning of %an, is a lawful organi:ation0 which accepts deposits that can be withdrawn on
demand. It also lends money to indiiduals and business houses that need it.
A ban, is a financial institution and a financial intermediary that accepts deposits and
channels those deposits into lending actiities0 either directly or through capital mar,ets. A
ban, connects customers that hae capital deficits to customers with capital surpluses. !ue to
their critical status within the financial system and the economy generally0 ban,s are highly
regulated in most countries. They are generally sub+ect to minimum capital requirements
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which are based on an international set of capital standards0 ,nown as the %asel Accords.
%an,ing in India originated in the last decades of the 4@th century. The first ban,s were The
$eneral %an, of India0 which started in 4?@60 and %an, of Hindustan0 which started in 4?D3G
both are now defunct. The oldest ban, in e8istence in India is the State %an, of India0 which
originated in the %an, of &alcutta in Fune 4@360 which almost immediately became the %an,
of %engal. This was one of the three presidency ban,s0 the other two being the %an, of
%ombay and the %an, of Madras0 all three of which were established under charters from the
%ritish "ast India &ompany. >or many years the 7residency ban,s acted as quasi)central
ban,s0 as did their successors. The three ban,s merged in 4D24 to form the Imperial %an, of
India0 which0 upon Indias independence0 became the State %an, of India in 4D55. Structure
of Indian %an,ing As per Section 5'b( of the %an,ing #egulation Act 4DCD ;%an,ing1 means
the accepting0 for the purpose of lending or inestment0 of deposits of money from the public0
repayable on demand or otherwise0 and withdral by cheque0 draft0 order or otherwise.1 All
ban,s which are included in the Second Schedule to the #esere %an, of India Act0 4DBC are
scheduled ban,s. These ban,s comprise Scheduled &ommercial %an,s and Scheduled
&ooperatie %an,s. Scheduled &ommercial %an,s in India are categori:ed into fie different
groups according to their ownership and J or nature of operation. These ban, groups are 'i(
State %an, of India and its Associates0 'ii( ationali:ed %an,s0 'iii( #egional #ural %an,s0
'i( >oreign %an,s and '( Other Indian Scheduled &ommercial %an,s 'in the priate sector(.
%esides the ationali:ed ban,s 'ma+ority equity holding is with the $oernment(0 the State
%an, of India 'S%I( 'ma+ority equity holding being with the #esere %an, of India( and the
associate ban,s of S%I 'ma+ority holding being with State %an, of India(0 the commercial
ban,s comprise foreign and Indian priate ban,s. While the State ban, of India and its
associates0 nationali:ed ban,s and #egional #ural %an,s are constituted under respectie
enactments of the 7arliament0 the priate sector ban,s are ban,ing companies as defined in
the %an,ing #egulation Act. These ban,s0 along with regional rural ban,s0 constitute the
public sector 'state owned( ban,ing system in India. The 7ublic Sector %an,s in India are
bac, bone of the Indian financial system. The cooperatie credit institutions are broadly
classified into urban credit cooperaties and rural credit cooperaties. Scheduled &o)
operatie %an,s consist of Scheduled State &o)operatie %an,s and Scheduled Krban &o)
operatie %an,s.
#egional #ural %an,s '##%=s( are state sponsored0 regionally based and rural oriented
commercial ban,s. The $oernment of India promulgated the #egional #ural %an,s
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Ordinance on 26th September 4D?50 which was later replaced by the #egional #ural %an,
Act 4D?6. The preamble to the Act states the ob+ectie to deelop rural economy by proiding
credit and facilities for the deelopment of agriculture0 trade0 commerce0 industry and other
productie actiities in the rural areas0 particularly to small and marginal farmers0 agricultural
laborers0 artisans and small entrepreneurs.
E1t-?4,1)/ent
The #esere %an, of India was established on April 40 4DB5 in accordance with the
proisions of the Re1er0e B-n o In(,- Act3 $=%:.
The &entral Office of the #esere %an, was initially established in &alcutta but was
permanently moed to Mumbai in 4DB?. The &entral Office is where the $oernor sits and
where policies are formulated.
Though originally priately owned0 since nationali:ation in 4DCD0 the #esere %an, is fully
owned by the $oernment of India.
Pre-/?4e
The 7reamble of the #esere %an, of India describes the basic functions of the #esere %an,
as
...to re*+4-te t)e ,11+e o B-n Note1 -n( eep,n* o re1er0e1 ,t) - 0,e to 1ec+r,n*
/onet-r2 1t-?,4,t2 ,n In(,- -n( *ener-442 to oper-te t)e c+rrenc2 -n( cre(,t 121te/ o
t)e co+ntr2 to ,t1 -(0-nt-*e.
M-,n +nct,on1
Monet-r2 A+t)or,t29
• >ormulates0 implements and monitors the monetary policy.
• Ob+ectie maintaining price stability and ensuring adequate flow of credit to
productie sectors.
Re*+4-tor -n( 1+per0,1or o t)e ,n-nc,-4 121te/9
10
https://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Acthttps://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Acthttps://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=Reserve%20Bank%20of%20India%20Act
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• 7rescribes broad parameters of ban,ing operations within which the countrys ban,ing
and financial system functions.
• Ob+ectie maintain public confidence in the system0 protect depositors interest and
proide cost)effectie ban,ing serices to the public.
M-n-*er o ore,*n Ec)-n*e
• Manages the >oreign "8change Management Act0 4DDD.
• Ob+ectie to facilitate e8ternal trade and payment and promote orderly deelopment
and maintenance of foreign e8change mar,et in India.
I11+er o c+rrenc29
• Issues and e8changes or destroys currency and coins not fit for circulation.
• Ob+ectie to gie the public adequate quantity of supplies of currency notes and coins
and in good quality.
De0e4op/ent-4 ro4e
• 7erforms a wide range of promotional functions to support national ob+ecties.
Re4-te( +nct,on1
• %an,er to the $oernment performs merchant ban,ing function for the central and
the state goernmentsG also acts as their ban,er.
• %an,er to ban,s maintains ban,ing accounts of all scheduled ban,s.
#egional #ural %an,s
#egional #ural %an,s hae been in e8istence for around B2 years in the Indian financial
scene. Inception of #egional #ural %an,s may be seen as a unique e8periment as well as
e8perience in improing the efficacy of rural credit deliery mechanism in India. /eeping in
iew the local peculiarities0 an effort was made to integrate commercial ban,ing within the
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broad policy framewor, towards social ban,ing through +oint shareholding of &entral
$oernment0 the &oncerned State $oernments and the Sponsoring %an,. The institution of
#egional #ural %an,s '##%s( was created to meet the e8cess demand for institutional credit
in the rural areas0 particularly among the economically and socially marginali:ed sections.
Although the cooperatie ban,s and the commercial ban,s had reasonable records in terms of
geographical coerage and disbursement of credit0 in terms of population groups the
cooperatie ban,s were dominated by the rural rich0 while the commercial ban,s had a clear
urban bias. The %an,ing &ommission '4D?2( recommended establishing an alternatie
institution for rural credit and ultimately $oernment of India established #egional #ural
%an,s L a separate institution basically for rural credit on the basis of the recommendations
of the Wor,ing $roup under the &hairmanship of Sh. M. arashimham. In order to proide
access to low)cost ban,ing facilities to the poor0 the arashimham Wor,ing $roup '4D?5(
proposed the establishment of a new set of ban,s0 as institutions which ;combine the local
feel and the familiarity with rural problems which the cooperaties possess and the degree of
business organi:ation0 ability to mobili:e deposits0 access to central money mar,ets and
moderni:ed outloo, which the commercial ban,s hae1. Subsequently0 the #egional #ural
%an,s were setup through the promulgation of ##% Act of 4D?6. The ##%s Act0 4D?6
succinctly sums up this oerall ision to sub)sere both the deelopmental and the
redistributie ob+ecties. The ##%s were established ;with a iew to deeloping the rural
economy by proiding0 for the purpose of deelopment of agriculture0 trade0 commerce0
industry and other productie actiities in the rural areas0 credit and other facilities0
particularly to small and marginal farmers0 agricultural laborers0 artisans and small
entrepreneurs0 and for matters connected therewith and incidental thereto1.#egional #ural
%an,s were supposed to eole as speciali:ed rural financial institutions for deeloping the
rural economy by proiding credit to small and marginal farmers0 agricultural labourers0
artisans and small entrepreneurs. Their equity is held by the &entral $oernment0 &oncerned
State $oernment and the Sponsor %an, in the proportion of 5345B5 respectiely. The
mandates of these rural financial institutions were to 'a( ta,e ban,ing to the doorsteps of the
rural masses0 particularly in areas without ban,ing facilitiesG 'b( ma,e aailable cheaper
institutional credit to the wea,er sections of society0 who were to be the only clients of these
ban,sG 'c( mobili:e rural saings and canali:e them for supportingproductie actiities in the
rural areasG 'd( generate employment opportunities in the rural areas.
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CHAPTER II6 REVIE# O LITERATURE
INANCIAL INCLUSION AND DEVELOPMENT
This role encapsulates the essence of renewed national focus on >inancial Inclusion0
promoting financial education and literacy and ma,ing credit aailable to productie sectors
of the economy including the rural and MSM" sector.
The Indian economy has changed since priority sector lending guidelines were conceied.
There is a need to reorient guidelines towards today=s growth and inclusion agenda. As such0
an Internal Wor,ing $roup was constituted by the #esere %an, with the ob+ectie of
reisiting the e8isting priority sector lending guidelines and suggesting reised guidelines in
alignment with the national priorities as well as financial inclusion goals of the country. The
ob+ecties also included suggesting ways on how to achiee the priority sector targets in the
most effectie way as well as measures to be ta,en in case of under)achieement of the
priority sector targets.
The Wor,ing $roup has focused on channelling credit to segments that get crowded out in
the absence of specific targets. These include small and marginal farmers0 micro enterprises
and the wea,er sections while broadening the scope to include other undersered categories
of national priority0 such as agriculture infrastructure0 social infrastructure0 renewable energy0
e8ports and medium si:ed enterprises. The report is currently under e8amination of the
#esere %an,.
&redit flow to priority sectors Macro policy formulation to strengthen credit flow to the
priority sectors. "nsuring priority sector lending becomes a tool for ban,s for capturing
untapped business opportunities among the financially e8cluded sections of society.
>inancial inclusion and financial literacy Help e8pand 7rime Minister=s Fan !hano+ana
'7MF!( to become a sustainable and scalable financial inclusion initiatie.
&redit flow to MSM" Stepping up credit flow to micro0 small and medium enterprises
'MSM"( sector0 rehabilitation of sic, units through timely credit support.
Institutions Strengthening institutional arrangements0 such as0 State
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RBI Br-nc) A+t)or,@-t,on Po4,c2 In order to e8tend the ban,ing networ, in unban,ed
areas0 general permission has been granted by #esere %an, of India '#%I( to domestic
Scheduled &ommercial %an,s 'other than #egional #ural %an,s( to open branchesJ mobile
branchesJ Administratie OfficesJ&7&s 'Serice %ranches(0 'i( in Tier 2 to Tier 6 centres
'with population up to DD0DDD( and 'ii( in rural0 semi)urban and urban centres of the orth)
"astern States and Si,,im sub+ect to reporting. #%I has adised ban,s that while preparing
their Annual %ranch "8pansion 7lan 'A%"7(0 the ban,s should allocate at least 25 percent of
the total number of branches proposed to be opened during a year in unban,ed rural 'Tier 5
and Tier 6( centres.
Ep-n1,on o BCA Netor %an,s hae been adised by !>S to e8tend ban,ing serices
to the entire geography of the country based on the concept of Sub Serice Area 'SSA(
comprising of 4333)4533 households. In case of orth)"ast0 Hilly States and sparsely
populated regions of other States ban,s may decide the households to be coered by each
%usiness &orrespondent Agent '%&A( appropriately. In case of larger $ram 7anchayats more
than one %&A could be appointed. In case of smaller $ram 7anchayats more than one
contiguous $ram 7anchayat0 ta,ing into consideration the geographical area0 could be
assigned to each %&A.
S-?),/--n Sc)e/e "arlier0 under the Swabhimaan campaign0 the %an,s were adised to
proide appropriate ban,ing facilities to habitations haing a population in e8cess of 2333 'as
per 2334 census( by March 2342. The ban,s identified appro8imately ?C333 habitations
across the country haing a population of oer 2333 for proiding ban,ing facilities. As per
reports receied from %an,s0 ?CB54 illages with population of aboe 2333 hae been
coered with ban,ing facilities either by branchesG %usiness &orrespondents0 mobile ban,ing
etc. by March B40 2342.
!irect %enefit Transfer '!%T( and !irect %enefit Transfer for
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'iii( Knderta,ing funds transfer using the ational Automated &learing House ) Aadhaar
7ayment %ridge System 'A&H)A7%S(.
'i( Strengthening of ban,ing infrastructure to enable beneficiary to withdraw money.
'i( !irect %enefit Transfer '!%T( The scheme was launched in the country from Fanuary0
234B and was rolled out in a phased manner0 starting with 25 welfare schemes0 in CB districts
and e8tended to additional ?@ districts and additional B schemes from 4st Fuly0 234B.
7resently !%T in B5 schemes hae been e8panded across the entire country.
!,," D,rect Bene,t Tr-n1er or LPG !DBTL" The !irect %enefit Transfer for
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affordable costs to the Indian ban,s so that dependency on international card scheme is
minimi:ed. This is in line with many of the large emerging nations li,e &hina which hae
their own domestic card payment system. $oernment of India has directed ban,s to issue
!ebit cards to all /&& and !%T beneficiaries and that eery new account holder should be
issued a debit card. A low cost option such as RuPaywill help in achieing this ob+ectie and
consequently help in fulfilling the ob+ectie of financial inclusion. The RuPay&ard wor,s on
ATM0 7oint of Sale terminals0 9 online purchases and is therefore not only at par with any
other card scheme in the world but also proides the customers with the fle8ibility of
payment options.
USSD B-1e( Mo?,4e B-n,n* 9 The !epartment through ational 7ayments &orporation of
India '7&I( wor,ed upon a ;&ommon KSS! 7latform1 for all %an,s and Telcos who wish
to offer the facility of Mobile %an,ing using Knstructured Supplementary Serice !ata
'KSS!( based Mobile %an,ing. The !epartment helped 7&I to get a common KSS! &ode
NDD for all Telcos. KSS! based Mobile %an,ing offers basic %an,ing facilities li,e Money
Transfer0 %ill 7ayments0 %alance "nquiries0 Merchant payments etc. on a simple $SM
'$lobal System for Mobile &ommunications( based Mobile phone0 without the need to
download application on a 7hone as required at present in the IM7S 'Immediate 7ayment
Serice( based Mobile %an,ing.
Transactions can be performed on basic phone handsets. The user needs to approach his ban,
and get his mobile number registered. The ban, will issue an M7I 'Mobile 7I( to the user.
The user thereafter needs to dial NDD and the menu for using KSS! opens. Thereafter
customer has to follow selections on the menu to complete the transaction.
Pr-()-n M-ntr, J-n6D)-nYoj-n- !PMJDY"
7radhan Mantri Fan)!hano+ana '7MF!( was formally launched on 2@th August0 234C. The
o+ana enisages uniersal access to ban,ing facilities with at least one basic ban,ing
account for eery household0 financial literacy0 access to credit0 insurance and pension. The
beneficiaries would get a #u7ay !ebit &ard haing inbuilt accident insurance coer of
#s.4.33 la,h. In addition there is a life insurance coer of #s.B3333J) to those people who
opened their ban, accounts for the first time between [email protected] to 26.34.2345 and meet
other eligibility conditions of the o+ana.
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7MF! is different from the earlier financial inclusion programme 'Swabhimaan( as it0 inter)
alia0 see,s to proide uniersal access to ban,ing serices across the country and focuses on
coerage of all households 'both rural and urban( while the earlier >inancial Inclusion
7rogramme was limited to proide access point to illages with population greater than 2333.
>urther0 7MF! focuses on interoperability of accounts which was not there earlierG has
simplified /& guidelines and inoles the !istricts and States for monitoring and follow)
up.
It has been clarified that e8isting account)holders need not open a new account to aail the
benefits under 7MF!. They can get the benefit of accident insurance by getting a #u7ay
debit card issued and Oerdraft limit by applying in the e8isting account. >urther0 it has also
been clarified that benefits of #s.B30 333J) life insurance coer are aailable only to those
whose accounts are opened for the first time between [email protected] to 26.34.2345.
Knder 7MF!0 ban,s were gien target to carry out sureys in allocated Sub Serice Areas
'SSAs( and Wards and to open accounts of all uncoered households by 26.34.2345. All the
StatesJKnion Territories in the country hae been mapped into 202604D? Sub)Serice Areas
'in rural areas( and Wards 'in urban areas( and out of total number of 24.22 crore sureyed
households0 ban, accounts hae been opened for DD.DD households.
7MF! has been implemented by ban,s successfully. As against the estimated target of
opening 43 crore accounts0 as on [email protected] 4D.32 crore accounts hae been opened out of
which 44.5@ crore accounts are in rural areas and ?.CC crore in urban areas. !eposits of #s.
25D4B.55 crore hae been mobili:ed. 46.B? &rore#epay !ebit cards hae been issued and
Aadhaar seeding has been done in @.33 crore accounts.
Oerdraft 'O!( in 7MF! accounts As on B3.43.23450 22.CB lac accounts hae been
sanctioned O! facility of which @.B? lac account)holders hae aailed this facility inoling
an amount of #s. [email protected]? la,h.
In1+r-nce C4-,/1 1ett4e(9
'a( As on B3.43.23450 out of 66D claims lodged0 63? hae been disposed off under accidental
insurance coer of #s. 4 la,h under #u7ay debit card.
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gone beyond the confines of arious financial regulators and assumed the character of a
broader national deelopment policy goal.
NABARD9
Gene1,1
At the instance of $oernment of India #esere %an, of India '#%I(0 constituted a committee
to reiew the arrangements for institutional credit for agriculture and rural deelopment
'A>I&A#!( on B3 March 4D?D0 under the &hairmanship of Shri %.Siaraman0 former
member of 7lanning &ommission0 $oernment of India to reiew the arrangements for
institutional credit for agriculture and rural deelopment. The &ommittee0 in its interim
report0 submitted on 2@ oember 4D?D0 felt the need for a new organi:ational deice for
proiding undiided attention0 forceful direction and pointed focus to the credit problems
arising out of integrated rural deelopment and recommended the formation of ational %an,
for Agriculture and #ural !eelopment'A%A#!(. The 7arliament0 through Act064 of 4D@40
approed the setting up of A%A#!. The ban, came into e8istence on 42 Fuly 4D@2 by
transferring the agricultural credit functions of #%I and refinance functions of the thenAgricultural #efinance and !eelopment &orporation 'A#!&(. A%A#! was dedicated to
the serice of the nation by the late 7rime Minister Smt. Indira $andhi on 35 oember
4D@2.
A%A#! was set up with an initial capital of 433 crore. &onsequent to the reision in the
composition of share capital between $oernment of India and #%I0 the paid up capital as on
B4 March 23450 stood at 5333 crore with $oernment of India holding C0D@3 crore
'DD.63( and #esere %an, of India 23.33 crore '3.C3(.
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CHAPTER III6 RESEARCH OBJECTIVES AND RESEARCH
METHDOLOGY
>ollowing are the main ob+ecties of the research study.
4( To study the rural ban,ing 'Saing(behaiour pattern amongst rural households in
/hutar0Shah+ahanpur.
2( To study the rural ban,ing '&redit(behaiour pattern amongst rural households in
/hutar0Shah+ahanpurJ.
HYPOTHESIS $.
4. KTIO WITH #K#A< %A/I$ >A&I
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RESEARCH METHODOLOGY
• D-t- So+rce19 In dealing with any real life problem0 it is often found that data at hand
are inadequate0 and hence0 it becomes necessary to collect data that are appropriate. We
hae chosen following methods
-" Pr,/-r2 (-t-9 These are those data0 which are collected afresh and for the first time0 and
thus happen to be original in character. We hae used the structured questioners.
?" Secon(-r2 (-t- These are those which hae already been collected by someone else and
which hae already been passed through the statistical process. We collect the data from the
sources li,e internet0 published data etc.
• Pop+4-t,on o t)e 1t+(29 This Study was conducted at /hutarshah+anapur.
• S-/p4,n* S,@e9 It is the total number of respondents targeted for collecting the data for
the research. We hae ta,en sample si:e of 63 respondents for our research.
• S-/p4,n* Tec)n,F+e9 #andom sampling technique is used in this research pro+ect.
RESEARCH PROCESS
#esearch is concerned with fact finding0 analysis and ealuation which are a part of research
process which consist of the following steps)
or/+4-t,on o re1e-rc) pro?4e/9 the first step is the formulation of research
problem. 7roblems are selected on priority basis according to their
Importance0 researcher=s interest and according to the feasibility of the research.
After the problem has been selected0 it is defined operationally.
L,ter-t+re 1+r0e2 the researcher must hae full literature literate ,nowledge on
the sub+ect on the sub+ect of his choice. Kpdated ,nowledge on the researcher topic
definitely helps what data and other materials are to be collected to properly define
the research problem
D-t- co44ect,on9 at the third step0 one has to decide about the method of data
collection. %y this we mean0 the techniques through which eidence or factual
information can be collected to test the hypothesis. The data can be collected from
primary and secondary sources.
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C4-11,,c-t,on -n( t-?+4-t,on9 classification is the way of arranging the data
in different classes in order to gie a define form and structure to the data collected.
The classified data may be arranged in tabular form in columns and rows.
An-421,1 -n( ,nterpret-t,on9 diagrammatic presentation0 graphs0 charts0
mathematical0 statistical tools etc. are used for analysis the collected data. 7roper
analysis helps in deeloping0 findings0 suggestions and conclusion.
Interpret-t,on o re1+4t19 results may be interpreted into action
recommendations must be communicated to proper authority.
Conc4+1,on -n( reco//en(-t,on9 the recommendation is made on the basisof conclusions are drawn on the basis of interpretation.
Report r,t,n* it is ery important for both researcher and reader. It should be
in simple language.
CONCLUSION9Hence it is proed that Presearch is must concerned with proper fact find0 analysis and ealuation.P
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CHAPTER IV9 DATA PRESENTATION AND
INTERPRETATION
A. $"!"#
GENDER NO.o re1pon(ent
MALE C?
EMALE 4B
Table. C.4 $ender
78%
22%
Gen(er o -/,42 )e-(
MALE FEMALE
>ig C.4 ) $"!"#
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ANALYSIS9 According to the aboe pie chart0 ?@ respondent of family head is male0 22
family head are female%. Age of family head
A*e o -/,42 )e-( No. re1pon(ent
:$ to 7& @
7$ to
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&.Marital status of family head
M-r,t-4 1t-t+1 o -/,42 )e-( NO.o re1pon(ent
M-rr,e( 53
Un/-rr,e( 5
Ot)er 1pec,2 5Table. C.B Marital status
83%
8%
8%
M-r,t-4 1t-t+1
Married Unmarried Other se!i"#
>ig C.B Marital status
ANALYSIS9 According to the aboe pie chart0 @B respondents are married0 D
respondents are unmarried and @ respondents are in other specify..
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!. "ducation of family head
E(+c-t,on o -/,42 )e-( NO.o re1pon(ent
I44,ter-te 42
Pr,/-r2 ?
B-1,c 44Metr,c 46
Inter/e(,-te 5
Gr-(+-t,on ?
Po1t *r-(+-t,on 2
Table C.C"ducation of family head
20%
12%
18%27%
8%
12%3%
Education of family head
$iterate &rimer# 'asi! Metri!
$ntermediate (rad)ation &ost *rad)tion
>ig C.C"ducation of family head
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". Occupation
Occ+p-t,on NO.o re1pon(ent
-r/er 2@
L-?o+rer 45
Go0t e/p. 5
Pr,0-te e/p. 2
Ot)er 1pec,2 43
Table. C.5 Occupation
47%
25%
8%
3%
17%
Occ+p-t,on
Farmer La+o)rer (o,t em &ri,ate em Other se!i"#
>ig. C.5Occupation
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>. O.of family member
NO.o -/,42 /e/?er NO.o re1pon(ent& to ' 2
7 to $& CD
$$ to $' D
Table. C.6umber of family member
3%
82%
15%
N+/?er o -/,42 /e/?er
0 to 5 6 to 10 11 to 15
>ig.C.6umber of family member
According to surey0 @2 respondents are between 6 to 43 family member0 B are between
3) 50 45 are between 44)45.
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$. "conomic status
Econo/,c 1t-t+1
NO.o re1pon(ent
APL B@BPL 22
Table .C.? "conomic status
63%
37%
Econo/,c-4 1t-t+1
A&L '&L
>ig. C.?"conomic status
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H. #eligion
Re4,*,on NO. o re1pon(ent1
H,n(+ 2D
M+14,/ 44
S,) 23Table. C.@-ei*ion
48%
18%
33%
Re4,*,on
.$/U MUL$M $.
>ig.C.@-ei*ion
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I. &ategory
C-te*or2 NO.o re1pon(ent
GEN 4B
OBC CC
SC 2
ST 4
Table. C.D &ategory
22%
73%
3%2%
C-te*or2
(E/ O'
>ig. C.D.&ategory
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F.
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4.4)!o you hae ban, AQ&R If yes then reason.
Re-1on1 or open,n* ?-n -cco+nt NO.o re1pon(ent
B-n pro/ot,on B
S-0,n* 26
Soc,-4 pre1t,*e 3
Lo-n 42
Peer pre11+re 6
Go0t re/,t 4B
Table. C.44#eason for opening of ban, account
5%
43%
20%
10%
22%
#eason for opening of ban, account
'an romotion a,in* so!ia resti*e
oan &eer ress)re (o,t remittan!es
>I$ .C.44#eason for opening of ban, account
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AAig. C.42isits to ban,
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>ig.C.4CSaed after opening of ban, account
AAig. C.45Saing option
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?. Has your credit demand decreased from informal ban,ing after financial
inclusionR J
Cre(,t (e/-n( ,n-nce ,nc4+1,on NO. o re1pon(ent
YES 2D
NO B4
Table.C.4? &redit demand after finance inclusion
48%52%
Credit demand after nance inclusion
:E /O
>ig.C.4?&redit demand after finance inclusion
ANANLYSIS According to the research there C@ respondents as,ing that there credit
demand decreased from informal ban,ing after financial inclusion0 52 as,ing credit demand
not decreased from informal ban,ing after financial inclusion.
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@. Hae you eer too, a loan after opening a ban, account J
Lo-n -ter open,n* o ?-n -cco+nt NO. o re1pon(ent
YES C2
NO 4@
[email protected]@loan after opening of bank account
ANANLYSIS According to the research ?3 respondents hae too, a loan after opening a
ban, account 0 B3 respondents hae not too, a loan after opening a ban, account .
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D. >rom where do you borrow creditR
Borro opt,on1 NO. o re1pon(ent
On42 or/-4 4?
On42 ,nor/-4 6
H,*) or/-4 44H,*) ,nor/-4 @
Bot) eF+-4 4@
Table.C.4D %orrow options
28%
10%
18%
13%
30%
Borro opt,on1
on# "orma on# in"orma hi*h "orma hi*h in"orma +oth e)a
>ig.C.4D %orrow options
ANANLYSIS According to the research 2@ respondents are borrowing from only formal0
43 from only informal0 4@ from high formal0 4C from high informal and other B3
respondents borrow from both.
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43. !o you hae credit cardR If es 4( /&& 2( $&& B( o
Cre(,t c-r( NO. o re1pon(ent
KCC B3
GCC 3
NO B3Table. C.23 &redit card
50%50%
Credit card
( /O
>ig. C.23 &redit card
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44. !o you eer participate in 4( Insurances 2( 7ension scheme B( Mutual
fundC( o
P-rt,c,p-t,on ,n ot)er
NO.o re1pon(ent
In1+r-nce1 25
Pen1,on 1c)e/e 45
M+t+-4 +n( C
NO 46
Table. C.247articipation in other
42%
25%
7%
27%
P-rt,c,p-t,on ,n ot)er
$ns)ran!es &ension s!heme M)t)a /o
>ig.C.247articipation in other
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42. Are you satisfied with rural ban,ing facilitiesR J.
S-t,1-ct,on NO.o re1pon(ent
YES C?NO 4B
Table.C.22Satisfaction
78%
22%
S-t,1-ct,on.
:E /O
>ig. C.22 Satisfaction
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CHAPTER V9 RESEARCH INDINGS
4. According to research 5 respondents opening their account ban, promotion0 CB for
saing0 23 for loan0 43 for peer pressure and 22 for their got. remittances .
2.According to the research 5 respondent=s isits to ban, daily0 23 respondents isit to
ban, wee,ly and 4? monthly and other 5@ as and when required
B.According to the research 42 respondents sae their money to repay old loan0 43 for
inest in business0 4@ respondents sae for education04B for the health05 for the
marriage and 22 respondents sae for the asset0 B for the ulnerability and other 4?
for the other specify.
C.According to the research that 6@ respondents hae saed after opening of the ban,
account and other B2 not saed after ban, account.
5.According to the research BD respondents sae their money in only formal0 4B in only
informal0 4B respondents sae their money in high formal0 45 in high informal and other
23 respondents sae their money in both.
6.According to the research 4@ respondents borrow credit for the income generation0 B
for the business e8pansion0 23 for the agriculture and allied0 23 for the repay the loan0
4C for the education0 4? for the health0 B for the assets0 B for the death and other
2 for the other specify.
?.According to the research C@ respondents as,ing that there credit demand decreased from
informal ban,ing after financial inclusion0 52 as,ing credit demand not decreased from
informal ban,ing after financial inclusion.
@.According to the research ?3 respondents hae too, a loan after opening a ban, account
0 B3 respondents hae not too, a loan after opening a ban, account .
D.According to the research 2@ respondents are borrowing from only formal0 43 from
only informal0 4@ from high formal0 4C from high informal and other B3 respondents
borrow from both.
43.According to the research 53 respondents hae /&& and 53 hae not any credit card.
44.According to the research C4 respondents hae participate in insurances0 25 pension
scheme0 ? in mutual fund and 2? respondents neer participate.
42.According to the research ?@ respondents are satisfied with rural ban,ing facilities and
other 22 are not satisfied with rural ban,ing facilities
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HYPOTHESIS $.
OBSERVED REUENCY
religion only
formal
only
informal
high
formal
high
informal
both
equal
Row
total
Hindu 10 4 5 1 9 29
Muslim 3 1 3 4 0 11
Sikh 4 1 3 3 9 20
Column
total
17 6 11 8 18 60
Table no.5.4.4 O%S"#*"! >#"K"&
E8PECTED REUENCY
Religion only
formal
only
informal
high
formal
high
informal
both
equal
Row
total
Hindu 8 3 5 4 9 29
Muslim 3 1 2 1 3 11
Sikh 6 2 4 3 6 20
Column
total
17 6 11 8 18 60
a+e.5.1.2"7"&T"! >#"K"&
Since the 7)alue '0.09( is biger than the significance leel '3.35(0 we are accepting the null
hypothesis. Thus we conclude that there isno relationship between religion and source of
borrow
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HYPOTHESIS 5
OBSERVED REUENCY
Economic
status
Yes no Row total
!" 28 10 38#!" 19 3 22Column total 47 13 60
Table .5.2.4O%S"#*"! >#"K"&
E8PECTED REUENCY
a+e.5.2.2"7"&T"! >#"K"&
Since the 7)alue '0.3( is biger than the significance leel '3.35(0 we are accepting the null
hypothesis. Thus we conclude that there isno relationship between economic status and
satisfaction with rural ban,ing serices
49
Economic
Status
Yes no Row total
pl 30 8 38
#pl 17 5 22
Column total 47 13 60
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CONCLUSION
#ural ban,ing plays a ery impotant role in tranforming rural india. %y proiding ban,ing
faciltities to rural households especially saing and credit hae enchanced their life. %ut still
a lot has to done on the side of rural ban,ing so that eery indiidual rural households can be
benefitted. #ecently the 7MF! 0 MK!#A and 7M% initaties ta,en up by the goernment
of india 0 #%I and A%A#! for the betterment of their financial and social security needs. In
order to aail the benefits of rural ban,ing resere ban, of india had ta,en seeral initaties
such as %& J %> model 0 KS% branch 0 SH$ funding and many more. The ma+or factors
which are creating obstacles to the rural ban,ing from rural households are too much
documentation0 time consuming process 0 collateral issue and the lac, of awareness regarding
the financial products. Hence in order to aail the benefits of financial inclusion goernment
should ma,e seeral changes such as customi:ed products 0 arrangement of funds
RESEARCH SCOPE
Since the current study is limited to data collected from illage areas only0 %ut the study can
be e8tended to rural areas also. The further scope of the study is that a comparison between
the Indian ban,s and ban,s of foreign countries can also be done using same conceptual
model. The time period of collecting secondary data can be e8tended from B years to 5 years
or more.
LIMITATIONS
There can be many interpretations and e8planations to the data collected. This is an empiricalstudy and the research proides the e8planation as understood by the researcher only.
The secondary data is collected for the period 2346 therefore more eidence• may be needed
to generali:e the results.
here is i;!)ties in eosit Mo+iisation
&ro!ed)ra -i*idities
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BIBLIOGRAPHY
1) www.rbi.org.in- Reserve bank of India
2) Www. finmin.nic.in- Ministry of finance
3) www.nabard.org.
4) www.pmdy.gov.in
5< Ahmed= -. >19982011
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APPENDICES
A STK! O TH" #K#A< %A/I$ %"HA*IO# AMO$ST
#K#A< HOKS"HO
ame code
*illage name %loc,
!istrict
• $ender of family head )4Male02>emale
• Age of family head
• Marital status of family head)4Married02Knmarried0BOther specify• "ducation of family head)4Illiterate027rimary0B%asic 0
CMetric05Intermediate06$raduation0?7ostgraduation
• Occupation)4>armer02
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5 Marriage0 6 Assets 7urchase0 ? *ulnerability0 @ Other Specify
If o #eason 4 Kse AJ& only for got. remittances0 2 Insufficient income0 B %ranch is far
away C %an, employee beh. 5!on=t ,now ban,ing operation0 6 Time consuming0 ? other
specify
Saving-Post financial inclusion status:
C. Hae you saed after opening of ban, accountJR
If no0 why specify reason
5. Where do you sae moreR
4. Only formal 2.Only informal
B. High formal C High informal
5 %oth equal
6. !O you borrow creditR esJO
If es)7ropose. 4Income generation0 2 %usiness e8pansion0 BAgriculture And Allied 0
C#epay old loans0 5"ducation0 6Health0 ?marriage0 @Assets 7urchases0 D!eath0 43Other
specify
If o)#eason .4 o need for a loan0 2 need a loan but worried about repayment capacity0 B
eed a loan but interest rate are high.
Post financial inclusion status:
?. Has your credit demand decreased from informal ban,ing after financial inclusionR J
@. Hae you eer too, a loan after opening a ban, account J
If "S
53
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'4( o. of credit ta,en ))))))
'2( 7urpose of credit U..
D. >rom where do you borrow creditR
'4(. only formal '2(.Only informal
'B(.High formal 'C(.High informal
'5(. both equal
43. !o you hae credit cardR If es 4( /&& 2( $&& B( o
If yes0 write down the purpose of using &redit card
If o0 why don=t you hae credit card.
44. !o you eer participate in 4 ( Insurances 2 ( 7ension scheme B ( Mutual fund. J
If o0 why.
42. Are you satisfied with rural ban,ing facilitiesR J.
If o0 why