IMPLEMENTATION OF FINANCIAL
INCLUSION THROUGH BC
MODEL
BY:-
PIYUSH PODDAR - 2004
SHUBHAM AGARWAL – 1995
FMS-IIRM 2011-2013
OBJECTIVES
To study the process of BC model in PNB.
To study the issues associated with BC model at ground level.
To analyse the level of awareness among rural people regarding the services provided by BCAs.
To analyse the level of implementation of BC model and working of BC Agents.
LIMITATIONS OF THE STUDY
Communication barrier
Lack of authority
Low interest of rural people
Limited sharing of information due to involvement of confidential data.
Time constraints.
Distance criterion was one of the constraints.
RESEARCH METHODOLOGY
• DESCRIPTIVERESEARCH TYPE
Deliberate & Random sampling
160 respondents &
8 BCAs
SAMPLE TYPE
SAMPLESIZE
QuestionnaireObservationInformal Interviews
Primary Data
Secondary Data
Data collection techniques
Bank’s literatureInternetNABARD report
Analysis Tool
(Ms-Excel)
Tools Of Data Interpretation(Bar graphs, Pie- charts &
Venn diagram)
Statistical
Tools
(Percentage
Method)
“Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as low income groups at an affordable cost.”
Financial inclusion
Government of India launched Third party banking in 2006 with the intent of achieving the milestone “Financial Inclusion”.The BC model was explained in 2008 report submitted by Dr. C. Rangarajan.Model was introduced to cater financial inclusion in a cost effective manner.RBI focused on ‘no frill account drive’ by regulating this model.It is based on branchless banking concept.The BCs are permitted to carry out transactions on behalf of the bank as agents
Business correspondent model
Opening of no frill and other regular deposit accounts under smart card.
Collection and payment of small value deposits and withdrawals
Payment of sanctioned. / disbursed small value loans
Receipt and delivery of small value remittances / other payment instruments
The BC/his agent will be authorized to accept / deliver cash either at his place of work or at any convenient location
Furnishing of mini account statements and other account information
Recovery of principal / collection of interest in respect of borrower accounts.
Any other service on behalf of the Bank, duly authorized by the appropriate authority.
Major activities of Business Correspondence agents
Established in 1895 in LahoreThe bank has over 35 million customers through 4540 offices including 421 extension countersPNB offers banking products, and also operates credit card and debit card business, bullion business, life and non-life insurance business, and gold coins and asset management business.It has also set up 11 specialized International Banking Branches (IBBs)
Organizational profile
Started in the year 2009 in PNB.
Started in 2011 in Jaipur district.
BC Model:-
Individuals were appointed as BCAs to impart the model.
The remunerations was fixed by the corporate BC. It was Rs.3000/month and Rs. 1/transaction more than 1000 transaction.
FWT(FTC) also work as BC model.
Bc model in pnb
Bank (PNB)
TSP (Integra)
Corporate BC (i25)
BC Agents
The various Technology components include the following:-
Smart CardPOS Machine with Biometric Devices, Smart card reader, Printer etc.Technology providers’ Intermediary ServicesBank’s Intermediary ServicesBank’s FINCBS ServerBank Main CBS Server
Technological details
Name of a/c holder
Photograph of a/c holder
Code of BCA
Modem ports
Finger print scanner
Display screen
Biometric card readerSmart card reader
Standard keyboard
Receipt printer
PROCESS FLOW
Customer
POS Machine
Vendor's Intermediary server
Bank's Intermediary Server
FINCBS Server
Main CBS Server
Signature & A/c details Capture
Data Flow
Data Validation & Data Upload
Updatation
FILE FORMAT CHANGE
DATA ANALYSIS
Data Analysis
Respondents
Household profile
FINANCIAL POSITION
BANKING HABIT
IMPLEMENTATION LEVEL
AWARENESS LEVEL
BCAs
63%
29%
4% 3%
EARNING MEMBERS
123>3
Household profile
12%
32%
17%
23%
12% 5%
EDUCATION LEVEL
ILLITERATEPRIMARYSECONDARYHSCSSCGRADUATE
AGRICULTURE
AGRI. ALLI
ED ACTIVITY
SELF
EMPLO
YED
GOVT. EM
PLOYEES
PVT. EM
PLOYEES
LABOUR
NOT WORKIN
G0
10
20
30
40
50
6059
6
41
5 3
28
18
EMPLOYMENT LEVEL
EMPLOYMENT LEVEL
86%
5% 9%
SAVINGS DETAILS
YESNONA
FINANCIAL POSITION
31%
18%13%
11%
28%
MONTHLY SAVINGS
<10001000-20002000-30003000-4000>4000
SAVING INSTITUTIONS
3(2%)
8(5%)
1(1%)
3(2%)
13 4(2%)
17(11%)
10(6%) 55(36%)
I-15
C-132
O-20
B-90
46(29%)
PO
NA
(8%)
T-160
Note:- Percentages are mentioned in Parenthesis
62%
38%
Saving A/c at bank branch or at other banks
YESNO
BANKING HABIT
54%
46%
LOAN AVAIL
YESNO
SOURCES OF LOAN
9 22(6%) (14%)
17 (11%)
7 (4%)
4 11 4(3%) (7%) (3%)
10 (6%)
72(46%)
2(2%)
NA
F & FMBO
S
Note:- Percentages are mentioned in Parenthesis
41%
59%
SMART CARD AVAILABILITY
YESNO
Implementation level
14%
27%
59%
SMART CARD USABILITY
YESNONA
20%
60%
20%
Usage of smart cards
None1 Time2 Time
NO100%
SATISFACTION LEVEL OF BENEFICIARIES
YESNO
59%
16%
12%14%
REASONS OF DISSATISFACTION
SMART CARDS NOT ISSUEDNOT RECOGNISING THE FINGER PRINTSACCESSIBILITY PROBLEMLIMIT OF TRANSACTION
18%
82%
AWARENESS OF PNB MITRA
YESNO
AWARENESS LEVEL
10%
90%
AWARENESS OF SWABHIMAAN
YESNO
43%
57%
AWARENESS OF DO’s & DONT’s OF A/c
YESNO
57%
40%
3%
PERCEPTION TOWARDS BANKING
NECESSARY & HELPFULFRAUD & CHEATINGTIME CONSUMINGONLY FOR ELITE & ED-UCATED CLASS
VILLAGES BASE BRANCH NAME OF BCAs TOTAL POPULATION
AOF SMART CARD ISSUED
NIWARU JHOTWARA Mrs. Karuna 7000 450 -
DHAULARAUJI KHAWARANIJI Nirmal Sharma 5500 350 5
DHAULA GATWADI Chitra Mal Kumawat 5000 150 -
BOBADI GATWADI Kailash Chandra Choudhary 3500 200 45
REHLANA HARSOLI Ritambhara Devi 7000 161 38
DHANDHOLI HARSOLI MahendraRaigar 3000 200 47
KHEDIMILAK KARANSAR BanwariLal 3500 365 21
SINODIA BHADHWA MalehandMalkar 5000 308 94
DATA COLLECTED THROUGH BCA
RATIO OF AOF TO THE TOTAL POPULATION
0
1000
2000
3000
4000
5000
6000
70007000
55005000
3500
7000
30003500
5000
450 350 150 200 161 200 365 308
TOTAL POPULATIONAOF
0
50
100
150
200
250
300
350
400
450450
350
150
200161
200
365
308
0 5 0
45 38 4721
94
AOFSmart Card
RATIO OF AOF TO SMART CARD ISSUED
75%
25%
DETAIL OF BCAs TRAINING
YESNO
YES100%
DESIRE MORE TRAINING
YESNO
NO100%
VISIT OF BASE BRANCH MANAGER
YESNO
NO100%
COMPENSATION DETAILS
YESNO
YES13%
NO88%
SPACE PROVIDED BY THE BANK
YESNO
Providing door steps services to the people helps in saving time and transportation cost.
Unawareness of No Frills Bank Account among the respondents.
Time constraint of issuing smart cards was of 4 months and more.
Operational issues of POS device & smart cards
Functional issues of BCAs training and compensation.
Slow process of implementation as no checking done till date.
Majority of respondents take loan from money lenders, friend and family for their needs at high rate of interest i.e. from 24% to 60%, showing a scope for the model.
RBI’s guidelines were not followed properly
No other product offered through smart cards other than saving and withdrawal
FINDINGS
suggestionsPNB should start counseling camps, visit of manager should be fixed per week to impart awareness regarding the program.
Time constraint while issuing smart card should be reduced by improving the work at TSP level.
BCAs compensations should be made so as to remove the grievance.
Majority of people engaged in taking loan from the institutions other than banks so loan facility like KCC should also be started through smart cards.
The service of Govt. payments like MNREGA, Pensions (Old age/Widow/PH) & Scholarships etc. could be introduced through smart cards in every village at a faster pace.
Bank may review the maximum transaction limit of the BCA. Further they may also develop systems to provide for emergency withdrawal of higher amount at the branch level.
Connectivity at village level should improved for hassle free operations at the ground level.
Bank/TSP should conduct the training programs for BCA focusing on maintenance of registers, POS handling, enrolling, and customer handling as also making them aware about other banking/ insurance products.
Technical improvements should be done by TSP to remove the technical snags of POS device and smart cards.
Audits should be done at regular intervals by TSP and bank’s authorities.