SHORT NOTES ON FINANCIAL INCLUSION
FINANCIAL INCLUSION
It is the delivery of financial services at affordable costs to
vast sections of disadvantaged and low income groups
Financial inclusion involves
1) Give formal banking services to poor people in urban &
rural areas.
2) Promote habit of money-savings, insurance, pension-investment
among poor-people.
3) Help them get loans at reasonable rates from normal banks. So
they don’t become victims in the hands of local moneylender.
1) Lead banking scheme (LBS).
2) No frills account.
3) BSBDA
4) Business Correspondents (BC) system.
5) Swabhiman Campaign
6) PMJDY
Lead Bank Scheme
The Lead Bank Scheme, introduced towards the end of 1969,
envisages assignment of lead roles to individual banks (both in public sector
and private sector) for the districts allotted to them. A bank having a
relatively large network of branches in the rural areas of a given district and
endowed with adequate financial and manpower resources has generally been
entrusted with the lead responsibility for that district. Accordingly, all the
districts in the country have been allotted to various banks. The lead bank
acts as a leader for coordinating the efforts of all credit institutions in the
allotted districts to increase the flow of credit to agriculture, small-scale
industries and other economic activities included in the priority sector in the
rural and semi-urban areas, with the district being the basic unit in terms of
geographical area.
No Frill Account
'No Frills 'account is a basic banking account. Such account
requires either nil minimum balance or very low minimum balance. Charges
applicable to such accounts are low. Services available to such account is
limited. In what can be described as a watershed Annual Policy Statement, the
RBI in 2005-06 called upon Indian banks to design a ‘no frills account’ – a no
precondition, low ‘minimum balance maintenance’ account with simplified KYC
(Know Your Customer) norms. But All the existing ‘No-frills’ accounts opened
were converted into BSBDA in compliance with the guidelines issued by RBI in
2012 .
BSBDA
RBI in 2012 came out with fresh guidelines and asked banks to
offer a ‘Basic Savings Bank Deposit Account’ which will offer following minimum
common facilities to all their customers. These guidelines includes:-
(a) This account shall not have the requirement of any minimum
balance.
(b) The services available in the account will include deposit and
withdrawal of cash at bank branch as well as ATMs; receipt/credit of money
through electronic payment channels or by means of deposit/collection of
cheques drawn by Central/State Government agencies and departments;
(c ) While there will be no limit on the number of deposits that
can be made in a month, account holders will be allowed a maximum of four
withdrawals in a month, including ATM withdrawals; and
(d) Facility of ATM card or ATM-cum-Debit Card.
Business Correspondent
Business correspondents are bank representatives. They personally
goes to the area allotted to them and carry out banking.
- They help villagers to open
bank accounts.
- They help villagers in
banking transactions. (deposit money, take money out of savings account,
loans etc.)
- The Business Correspondent
carries a mobile device.
- The villager gives his thumb
impression or electronic signature, and get the money.
- Business Correspondents get
commission from bank for every new account opened, every transaction made
via them, every loan-application processed etc.
Recently on Financial Inclusion
The Reserve Bank of India (RBI) has constituted a committee with
the objective of working out a medium-term (five-year) measurable action plan
for financial inclusion. The terms of reference will include reviewing the
existing policy of financial inclusion, including supportive payment system and
customer protection framework, taking into account the recommendations made by
various committees set up earlier.
It will also study the cross-country experience in financial
inclusion to identify key learnings, particularly in the area of
technology-based delivery models, that could inform policies and practices. The
committee will also suggest a monitorable medium-term plan for financial
inclusion in terms of its various components like payments, deposit, credit,
social security transfers, pension and insurance.
SHORT NOTES ON FINANCIAL INCLUSION
Reviewed by
SSC IBPS
on
17:12:00
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