Seminar on Financial Inclusion Presentation by S.D.Bargir, Joint Director, IIBF PUNE

agenda Financial inclusion Financial inclusion Financial exclusion Financial exclusion Strategy for financial inclusion Strategy for financial inclusion International experience International experience Indian scenario Indian scenario Problem areas Problem areas Remedy Remedy Conclusion Conclusion

What is financial inclusion? It is the delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income group It is the delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income group

Financial exclusions-reasons Poverty Poverty Ignorance- lack of knowledge on financial matters Ignorance- lack of knowledge on financial matters Environment Environment

Financial Exclusion Consequences of Financial Exclusion Consequences of Financial Exclusion

Financial inclusion Strategy too vary from country to country – in western countries the issues are very different and numbers are few Strategy too vary from country to country – in western countries the issues are very different and numbers are few Scope of FI can be expanded by Scope of FI can be expanded by  state-driven intervention  voluntary effort by the banking community

state-driven intervention The Micro Financial Sector Development and Regulation Bill The Micro Financial Sector Development and Regulation Bill RBI stipulation RBI stipulation

Efforts by banking community No-Frills' Account Simplification of 'Know Your Customer (KYC)' Norms reasonable bank charges reasonable bank charges

International experience in promoting financial inclusion Three priority areas Three priority areas  access to banking  access to affordable credit  access to free face-to-face money advice. established a Financial Inclusion Fund established a Financial Inclusion Fund

Indian Scenario About bank branches About bank branches average population per branch 16,000 average population per branch 16,000 41% of population still unbanked 41% of population still unbanked 61% of rural population still unbanked 61% of rural population still unbanked 40% of urban population still unbanked 40% of urban population still unbanked under-banked states are Bihar, Orissa, Rajasthan, Uttar Pradesh, Chattisgarh, Jharkhand, West Bengal and Northeastern states under-banked states are Bihar, Orissa, Rajasthan, Uttar Pradesh, Chattisgarh, Jharkhand, West Bengal and Northeastern states

What are problem areas lack of proper technology lack of proper technology Lack of business model Lack of business model inadequate system inadequate system gaps in structure and strategy gaps in structure and strategy infrastructure infrastructure weak delivery model weak delivery model lack of proper product formulation lack of proper product formulation

What is remedy technology-savvy banking system technology-savvy banking system Provision of ‘smart card’ to access the banking system irrespective of one’s location. Provision of ‘smart card’ to access the banking system irrespective of one’s location. Financial education Financial education  building skills  increasing knowledge  develop understanding

Whom to be included Urban artisans and craftsmen Urban artisans and craftsmen urban home based workers urban home based workers Shepherds Shepherds unskilled daily wage labourers unskilled daily wage labourers traditional farmers, Dairy farmers traditional farmers, Dairy farmers low income earners low income earners All ethnic groups All ethnic groups Persons living in areas of high deprivation Persons living in areas of high deprivation

. Thank you