Common financial inclusion program
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The document discusses common financial inclusion programs in rural India. It begins by providing an overview of the rural landscape, including the number of districts by state. It then discusses the existing rural footprint of banks like regional rural banks and lead banks in districts. The scope section outlines the goals of creating scalable business models, tailored solutions, and collaboration between stakeholders to revitalize rural areas. It proposes hub and spoke models and disentangaging technology from distribution to strengthen last mile access. The need for a strong technology backbone and reliable last mile distribution is also highlighted.
Common financial inclusion program
- 2. CONTENTS ï‚¢ Rural landscape ï‚¢ Rural footprint of banks ï‚¢ Scope of inclusive banking programme 2
- 3. RURAL LANDSCAPE – TOTAL NO. OF DISTRICTS(600) # State Dist. # State Dist. 1 Andhra Pradesh 23 15 Maharashtra 35 2 Arunachal Pradesh 14 16 Manipur 9 3 Assam 23 17 Meghalaya 7 4 Bihar 37 18 Mizoram 8 5 Chhattisgarh 16 19 Nagaland 8 6 Goa 2 20 Orissa 30 7 Gujarat 25 21 Punjab 17 8 Haryana 19 22 Rajasthan 32 9 Himachal Pradesh 12 23 Sikkim 4 10 Jammu and Kashmir 14 24 Tamil Nadu 29 11 Jharkhand 22 25 Tripura 4 12 Karnataka 27 26 Uttarakhand 13 13 Kerala 14 27 Uttar Pradesh 70 14 Madhya Pradesh 48 28 West Bengal 19 # UT Dist. # UT Dist. A Andaman and Nicobar Islands 2 E Lakshadweep 1 B Chandigarh 1 F Pondicherry 4 C Dadra and Nagar Haveli 1 G Delhi 9 D Daman and Diu 1 Source: 3 http://en.wikipedia.org/wiki/List_of_Indian_districts
- 4. RURAL LANDSCAPE – INFRASTRUCTURE CROSS- SECTION Able – 160 (17%) Deprived – 248 (50%) Urban cousins – Rural economic 67 (10%) Centres – 118 (23%) 4 Majority of the population resides in areas with minimal infra. and accessibility Fig. in brackets are % of Source: Bharat Nirman Plus: rural pop. Report by Mckinsey for CII
- 5. FOOTPRINT @ RURAL LEVEL  No. of sponsored Regional Rural Banks (RRBs) – 177 *  These banks have a large rural presence incl. remote areas  Their governance is largely influenced by the sponsoring PSBs  Many of these have some level computerisation  Lead banks in districts  Traditionally PSBs have been lead banks in most districts in India  They are the channelising agency for development in those districts  This is a non-competitive arrangement between banks with a social banking objective  Rural branches of commercial banks  Total no. of rural branches 30754 (estimate)  Total no. of villages in India 6,38,365 (2001 census)  These are brick & mortar branches which have the potential of technology investment  Post Offices  Over 1.5 lacs post offices in India of which ~ 1.3 lacs in villages  Other distribution entities  Local merchants, telco agents > 6 lacs  Common Service centres ~ 1 lac  Insurance agents, dairies etc. 5 Substantial rural footprint is currently available for leveraging as hubs * Source : The Performance of Regional Rural Banks (RRBs) in India:Has Past Anything to Suggest for Future?
- 6. SCOPE OF THE INCLUSIVE BANKING PROGRAM Creating successful business delivery models which can be replicated in view of the diversity of rural India Creating tailored solutions to ensure effectiveness and sustainability of the initiative Ensuring a concerted effort by all key stakeholders to rejuvenate rural India 6
- 7. Creating successful business delivery models which can be replicated in view of the diversity of rural India BUSINESS DELIVERY MODELS ï‚¢ Inter - Bank collaboration ï‚— Standardising the product suite, service pack on offer ï‚— Standardising business processes, risks ï‚— Standardising enrollment of 3rd party agencies/ service providers ï‚— Non-competitive areas of concentration say based on lead districts, RRB presence etc. ï‚— Complimentary shared services in the areas of ï‚¢ Field force training ï‚¢ Support network at the field level ï‚¢ Joint negotiation with vendors 7 Banks become nodal agencies for rural initiatives and leverage existing setups
- 8. Creating tailored solutions to ensure effectiveness and sustainability of the initiative IMPLEMENTATION APPROACH – HUB & SPOKE MODEL Txn Delivery District Category Solution model Characteristics Urban/ CBS + internet kiosks + Branch staff Urban POS online (Slums) Cousins Rural RRBs + lead bank rural economic CBS + internet kiosks + branches centres POS online RRB’s as nodal branches + CBS for nodal branches + 3rd party merchants etc. Able POS Robust & Scalable Architecture RRB’s as nodal branches + CBS for nodal branches + 3rd party merchants etc. Deprived POS 8 Customised solution models for a standard implementation approach
- 9. Ensuring a concerted effort by all key stakeholders to rejuvenate rural India COMMON FINANCIAL INCLUSION  Inter – industry collaboration  Collaboration with insurance companies for addressing insurance requirements  Collaboration with NGO’s/SHG’s  Collaboration with companies engaged in rural development like power, telecom, road, fertilizer etc.  Collaboration with educational institutions for rural vocational education  Bank – Govt. collaboration  Channelising agencies for NREGA funds, subsidies etc.  Channelising agencies for Bharat Nirman funds  Subsidies/schemes for infrastructure development at the local level say  Alternate power e.g. biomass, wind  Rain-water harvesting for water  Roads  Subject Matter Expert’s (SME’s) to accompany service provider for technical assistance 9 Collaborative effort in ensuring funding – channelising - operationalising
- 10. Ensuring a concerted effort by all key stakeholders to rejuvenate rural India DISENGAGING TECHNOLOGY & DISTRIBUTION Local Merchant Dairies, Insurance Customer Co-op Banks / agents Self- PACS /RRB etc. service All bank branches Common Service Centers, Post Offices PC / Kiosk / POS / Mobile…. Authentication System Centralised Gateway Credit Information Bureau e.g. AADHAR (ala Visa/Mastercard e.g. CIBIL for cards) - 10 - Back end systems e.g. bank, insurance, government etc.
- 11. Ensuring a concerted effort by all key stakeholders to rejuvenate rural India CREATING A STRONG TECHNOLOGY BACK BONE ï‚¢ Backbone - Messaging Super-Highway to form the central message carrier & distribution grid ï‚¢ Empanelling last mile technology ï‚— Inter-operable technologies ï‚— Standards driven approach ï‚— Compatibility with central messaging backbone ï‚— Common maintenance, repair & helpdesk at the local level ï‚¢ Leverage existing settlement systems
- 12. Ensuring a concerted effort by all key stakeholders to rejuvenate rural India STRENGTHENING LAST MILE DISTRIBUTION Community involvement Favorable Shared Shared Trust Cost- Training Support benefit Reliable services
- 13. Ensuring a concerted effort by all key stakeholders to rejuvenate rural India STATE OF AFFAIRS  Confused customer – multiple cards, multiple touch points, local money lender still scores on reliability of service  Banks / insurance companies – no business case, no real integration with the normal banking systems, limited banking products made available to the customer  Govt. – steam-rolling AADHAR as the panacea without adequate on-ground experience/civil society involvement to support, multiple ministries/departments singing their own tunes, treating rural India as one homogenous segment to woe with doles
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