Financial Financial InclusionInclusion
Innovations & Initiatives
What is Financial InclusionWhat is Financial Inclusion
Financial Inclusion is a comprehensive and holistic process of ensuring access to financial services by all the people in a fair, transparent and equitable manner at affordable cost.
Nearly 60% of the population in Odisha do not have access to the basic financial services.
Need for making banking and payment services available to the entire population at affordable cost and without discrimination.
The financial inclusion helps people to benefit from the overall socio-economic growth and development of the State.
Empowering people to take their financial decisions in the best possible way for themselves.
Why Financial Inclusion Why Financial Inclusion (FI)(FI)
Benefits of encouraging Financial InclusionBenefits of encouraging Financial Inclusion
To the Customer:Affordable access to banking services practically at the doorstep
Availability of Govt Benefits direct in bank accounts
Loans and Remittance Facility (Migrants)
Surplus income Saving/Safety-
Empowerment of women
Release from the clutches of local money lenders
Improvement in Economic status.
Improved financial literacy
To BC
Employment opportunity
Opportunity to expand existing business
Ride on the Brand name of the Bank
Respectable Image in society
Customer base for its own activities other than banking activities
To Bank:Increase Outreach
Increase Customers Base
Improving Market share
Potential business
Low investment outlets/low transaction cost
Low cost CASA deposits
Corporate Social Responsibility
To Govt:Reaching out to unbanked population.
Inculcating saving /banking habit
Reducing migration to urban centres
Speeding up economic development
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Availability – Point of presence & Choice of products
Awareness – Information, Education, Communication
Acceptability – Value desired by the customers
Affordability – Value for money
Accessibility – Convenience, lower entry thresholds
5 A’s of Financial Inclusion
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● Liberalised KYC norms● Allowing engagement of BC/BF by banks for
providing the last mile banking and financial services.
● Liberalised branch opening by relaxing branch licensing policy.
● Introduction of new banking products such as “No-frills” accounts (Basic Savings Bank Deposit Accounts), Small SB Accounts, loan products like GCC, KCC.
Initiatives to facilitate FIInitiatives to facilitate FI
● Covered 833 villages with population >2000 by March 2013.
● 2685 villages with population below 2000 have been covered till end of December 2013.
● 2775 more villages will be covered by March 2014.
● Opened 588 rural and semi-urban branches to reach hinterland of Odisha.
● Have plans to open 27 more branches in unbanked villages by March 2014.
● More than 800 CSPs of SBI are also operating in villages. 1000 more will be opened by March 2015
FIP Initiatives of SBI in FIP Initiatives of SBI in OdishaOdisha
Financial Financial InclusionInclusion
Coverage of unbanked villagesMicro
Credit
Activate inactive CSPs /
Accounts
Setting up of Branches/CSPs/ATMs
Account opening & Aadhaar Seeding of DBT/DBTL
beneficiaries
Improvement in
Transactions in BC channel
accounts ATM Cards to DBT beneficiaries/FI /KCCs customers
Spread Financial Literacy/
Awareness
Financial Inclusion: Current Thrust
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Challenges
Technology
BC Channel
Viability of BC channel Engaging CSPs in small villages remains unviable. Acceptability of BC model in rural masses.Many BC outlets are inactive.Attrition of CSPs.Around 60% of accounts opened through BC channel are inoperative
Scalability and sustainability (Business Continuity, Disaster Recovery, etc.)Technology upgradation is happening at faster pace but the functionality of BC delivery platform at front-end has to be simple and user friendly. Managing multiple and evolving technologies involves cost
Viability Issues
Low Business Volume Low transactions value Higher capital expenditure in technology & BC
roll out. Overall, Viability remains critical in low potential
centres.
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Challenges - Continued
Network connectivity in many villages is very poor or erratic.Stable supply of electricity for operationsLaw and order position in certain parts of the State. 14 backward/Left Wing Extremism (LWE) affected district in SBI’s area of operations.
Infrastructure
SHG Credit linkage
SHGs formation slowing down Micro Finance Institutions (MFIs) are slowly adjusting to regulatory framework
DBTSlow progress in Aadhaar enrolment and seeding of accounts.
Operational Risk
Risks associated with outsourcing Reputation risk (for poor/discontinued service,
frauds, mis-selling)
OthersCash Management Cost of movement of Cash Risk associated with movement and retention of cash
Financial Literacy is having basic knowledge of managing one’s own money and developing thrift habits.
‘A rupee saved is a rupee earned.” A person who is financially literate can spend
wisely, use scarce resources more effectively.We have 19 FLCs in the state to impart the
knowledge of the need for and benefits of saving in the formal financial system.
Conducted 281 programmes for 10373 villagers.
Conducted audio-visual shows highlighting the risky nature of chitfund and why formal financial institutions should be preferred for saving.
Financial Learning CentresFinancial Learning Centres
F I F I productproduct
ss
SB cum OD
Recurring Deposit
Micro Credit
Remittances
Tatkal (non-home transactions)
Micro Insurance
Fixed Deposit
FI Products through BCs
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● Internet based Kiosk Banking platform for real-time transactions.
● Micro ATM or “Cash at POS” operating on GPRS. Already 443 of such POS machines are in use by the BCs of the Bank. Also issued so far 55600 RuPay FI debit cards for use in ATMs and POS machines.
● Mobile phone based handheld devices for banking services.
● Personal Accident Insurance cover at reasonable cost.
Extensive use of ICT by SBIExtensive use of ICT by SBI
Cash at POSCash at POS
Debit card and POS Debit card and POS machinemachine
Kiosk Banking & POS- Kiosk Banking & POS- AccessoriesAccessories
FI Activity thru Br & BC channel
MARCH ’11
MARCH ’12
MARCH ’13
DEC ’13
No. of accounts (000)
1096 1413 1711 2040
% growth - 28.9 21.1 25.6 (annualise
d)
Balance in lacs
4596 3552 5344 9593
% growth - (-)22.7 50.5 79.5
Achievement of SBI in Achievement of SBI in OdishaOdisha
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