Rural banking through ICT Om Pal (07405702) Under Guidance of Prof. Krithi Ramamritham and Prof. U.B. Desai Department of Computer Science and Engineering, Indian Institute of Technology, Bombay 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Present Status (India) Rural population of about 780 million with limited access to financial services. Informal credit in India amounts to Rs.3.5 lac cr. A high proportion of rural lending is from informal sources. About 500-600 million people in India still do not have bank accounts. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Present Status Cont.. Rural economy (agriculture + non-agriculture) constitutes about 50% of GDP. Banks have woken up to the potential in the rural sector . current demand for credit in Rural India is around Rs.1,33,000 crores. Commercial Bank branches cover only 7% of rural sector and large market is still untapped. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Present Income Status 9/21/2018 CS671 Seminar: Rural Banking Through ICT

What is needed from Banks Focus on non farm rural business. Greater levels of financial inclusion. Reach out to the needy through micro credit/SHGs(Self Help Group). Easy and affordable financial services through the best use of technology. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Expand reach through alternate channels. exclusive focused attention to the financial Inclusion of unbanked rural area. To extend banking services at the customer’s convenience. Improvement in service levels in Rural Areas. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Ultimate Goal Should Be.. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Possible Rural Financial Inclusion 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Rural banking faces twin challenges BANKING in rural India is facing with the twin challenges of regulation and distribution. Regulation with respect to banking has been designed for delivery in urban India. Distribution required more manpower to be deployed in rural area. Rs 1-crore business in microfinance required 30 people in terms of manpower, the same volume of business in other portfolios required only one person. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Case Study - SBI The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. Micro finance deeply ingrained in SBI. Social obligation services like E-Ticketing. Comprehensive financial services, viz., savings, credit, remittances, insurance and financial products through ICT. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Some Rural Projects Of SBI SBI TINY ACCOUNT - Opening of simple savings accounts for the villagers with zero balance. One of the villagers as SBI Mitra. Drop Box for depositing cash – at the SBI Mitra’s shop / house. Small emergency loan. SBI Mitra assists in opening account. Piloted in Bahirgaon village in Maharashtra. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT SBI TINY SMART CARDS A smart card with photo and fingerprint. Card serves as the account. Can be used for govt disbursals, insurance and loan disbursals. KCC This is medium limit card of Rs.20,000. Farmers can withdraw partial amount from card. 2.5% annual interest only on withdraw led amount. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Impact of SHGs-SBI 6400 thousand women beneficiaries. Increase in income. Increase in expenditure on education, clothes and health. Improvement in status of women and their confidence level. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Improved health and hygiene. Better housing. Decline in social evils. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

Rural Bank and Microfinance in Uganda (Case Study) There are three government-recognized banks at Wakiso, Mpigi, and Kiboga epicenters. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT The youngest bank is at Kiboga epicenter. This bank received official government recognition and was inaugurated in January 2007. To date, the bank has 358 members (307 women and 51 men) and has disbursed loans to 207 women in 23 groups and 46 men in 5 groups. Savings at the end of the first quarter 2007 stood at 24,047,150 Ugandan Shillings ($13,741), and shares stand at 3,745,000 Shillings (~$2,140). 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Mpigi epicenter is the second oldest recognized bank in Uganda. Formal recognition was obtained in January 2006. the bank began with 119 members. Today there are 404 members, and members’ savings total 25,777,703 Shillings (~$14,730). Wakiso epicenter is home to the first government-recognized Hunger Project bank in Uganda. The bank currently has 880 members and hopes to reach 1,000 by the end of the year. 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT The bank is indeed growing and has become a model for the whole Hunger Project-Africa microfinance program. Wakiso rural bank now offers its members various types of savings, loan, and insurance products. Education and emergency loans are also in development. With the help of above banks, Group and individual income-generating projects are in running mode which included pineapple farming and pig, goat, and poultry-raising . 9/21/2018 CS671 Seminar: Rural Banking Through ICT

CS671 Seminar: Rural Banking Through ICT Thank you 9/21/2018 CS671 Seminar: Rural Banking Through ICT