1. Rural Banking Using cooperative Rural Banking Using cooperatives By Anoop Deshpande, Advocate, Bangalore Former Managing Director, Karnataka State Souharda Federal Cooperative Ltd., Bangalore

2. Rural Banking Using cooperative Banking in India  In 2000 Over 70% of India’s population lived in rural areas.  3/4 th of poor Indians live in India. “India lives in villages”  But Rural India is far away from the reach of Banks.  “If a mobile telephony can reach remote villages, why can’t Banks go there?”- CEO of Bank

3. Rural Banking Using cooperative Population per Bank CountryPopulation per Bank Canada 2233 France2350 Germany1481 Italy1400 Japan1961* Switzerland1097 USA3469 *Note: Figures exclude post office deposits of Japan (35% of deposits)

4. Rural Banking Using cooperative Population per Bank India StatePopulation per Bank Delhi 9000 Jammu & Kasmir13000 Arunachal Pradesh33000 West Bengal19000 Goa4000 Gujarat15000 Maharashtra16000 Karnataka11000 Tamilnadu13000

5. Rural Banking Using cooperative Population per Bank India RegionPopulation per Bank North 13000 North Eastern22000 Eastern20000 Central20000 Western15000 Southern12000

6. Rural Banking Using cooperative Population per Bank India RegionPopulation per Bank Rural 31958 Semi Urban15375 Urban11498 Metropolitan9285 Branch network of 68116 with an average population per Bank Branch of 16000

7. Rural Banking Using cooperative Relative share of borrowing of cultivator households Sources of credit1951197119912001 Non institutional of which money lenders 92.768.330.638.9 Insitutional, of which Cooperative societies 3.3223030.2 Commercial banks 0.92.435.226.3

8. Rural Banking Using cooperative Number of Savings Accounts per 100 Region199120051991200519912005 TotalRuralUrban North40.038.330.129.762.655.4 North East17.817.616.116.428.424.2 Eastern21.820.517.716.940.036.1 Central23.824.521.022.134.732.9 Western35.532.524.723.853.845.2 Southern37.037.634.635.542.741.8 All India29.929.224.524.445.641.6

9. Rural Banking Using cooperative Savings Accounts  UK 5% of population donot have bank Account  Australia 7-8% of population do not have bank account

10. Rural Banking Using cooperative Savings Accounts India  Total 31 Crore Bank Accounts.  Excluding multiple accounts 20 crore peple have bank accounts.  85% people donot have bank account Pondycherry:  Literacy rate 85%  85 branches in 264 villages  10lakh adult population:  6.67 bank accounts:  Actual account holders:3 lakhs

11. Rural Banking Using cooperative Number of Credit Accounts per 100 Region199120051991200519912005 TotalRuralUrban North6.45.76.65.15.96.7 North East4.43.34.43.24.43.9 Eastern6.64.27.24.24.3 Central5.54.35.84.24.44.5 Western5.77.56.24.24.812.2 Southern11.814.213.612.77.617.4 All India7.37.07.96.05.59.8

12. Rural Banking Using cooperative Banking in India  Total villages in india: 6,34,321  Only 9000 villages have multiple banks  Total 32,227 rural branches: 45% total branch network  60% rural house holds donot have bank account  70% marginal farmers do not have deposit accounts.

13. Rural Banking Using cooperative Alternate banking  Agricultural Cooperative societies.  Non agricultural cooperative societies  SHG’s  RBI has also permitted commercial banks to appoint Cooperative societies & NGO’s as Business facilitators and business correspondents RBI/2005-06/288 DBOD.No.BL.BC. 58/22.01.001/2005-2006 dated 25 Jan 2006

14. Rural Banking Using cooperative Alternate banking Initiative in Karnataka  Formation of Self help cooperatives.  Combination of SHG and cooperative society.  Collection of regular thrift.  Provision to deposit extra savings.  Lending to group from society  Lending to individual directly from society on security.

15. Rural Banking Using cooperative Alternate banking Self help cooperative Thrift cooperative 2. Formation of Group 1. Membership

16. Rural Banking Using cooperative Alternate banking Self help cooperative: Savings Thrift cooperative Compulsory thrift in group Extra savings to coop

17. Rural Banking Using cooperative Alternate banking Self help cooperative: Credit Thrift cooperative Credit from coop: individual responsibility Credit to group: group responsibility

18. Rural Banking Using cooperative Alternate banking Moving from Micro Finance to Micro Banking

19. Rural Banking Using cooperative Alternate banking Initiative in Karnataka oMore than 200 Thrift cooperative in Karnataka under KSS Act, 1997 oMany NGO’s and Governmental organs are actively promoting: Karnataka Women and Child Welfare Department Karnataka Water Shed development Program BAIF Sahachara

20. Rural Banking Using cooperative Alternate banking Karnataka Souharda Sahakari Act, 1997  No Government money No intervention.  Self regulation.  Responsibility to members.  Professionalism.  Truly democratically member controlled.  Elected autonomous regulatory authority.  Cooperatives are seen as business enterprises

21. Rural Banking Using cooperative Cooperatives in India Coverage of Rural Households67% Villages covered by cooperatives100% Agricultural Credit Disbursed by Coops 46.31% Sugar Produced (7.062 million Tonnes) 54.95% Milk Procurement to Total Production 6.70% Milk Procurement to Marketable Surplus 10.00%

22. Rural Banking Using cooperative THANK YOU