How to Implement the Financial Inclusion and what are the Procedural Guidelines?
Branches are aware that Financial Inclusion is an essential aspect of ensuring inclusive growth. In line with the policy initiatives of the Government of India and RBI, the banks in India have taken up the mammoth task of taking the benefits of financial services to the doorsteps of the vast majority of the unbanked population. Viability considerations would not permit large-scale opening of branches to meet this challenge.
Therefore Technology backed solutions using services of Business Correspondents (BCs) / Business Facilitators (BFs) are seen as the only effective tool for achieving this objective.
|Financially Excluded Segments||Most needed services|
|Poor||Access to small loans or Overdrafts|
|Socially under-privileged||Checking accounts|
|Disabled||Small savings products|
|Old as well as children||Remittances and payment services|
|Ethnic minorities||Insurance against the failure of the activity|
|Unemployed||Financial advisory services|
|Low-income self-employed||Credit cards (GCC, KCC )|
|Agricultural and Industrial Labours||Entrepreneurship credit|
- It may appear in the first instance that taking banking to the sections constituting “The bottom of the Pyramid” may not be profitable but it should always be remembered that even the relatively low margins on high volumes can be a very profitable proposition.
- Providing financial services to the rural poor at their doorsteps provide immense opportunities for business growth and cross-selling of our products apart from fulfilling the national objective of financial inclusive growth.
- This will evolve into a new vibrant delivery channel in the rural and semi-urban areas providing secure banking transactions at any time of the day at a low cost with a human touch.
- The customers need not travel long distances and spend money and time for commuting from their place to the bank.
- The people below poverty line need not lose their hard-earned wages for attending their banking needs.
- The customers can save time and can deposit / withdraw small amounts without having to fill up any challan, cheque leaves and vouchers and can do transactions at any time of the day.
- The Financial Inclusion will definitely help our branches improving CASA deposits and as well as Priority Sector Advances / Agricultural Advances.
In order to achieve the national objective of inclusive growth, RBI is permitting Banks to do Branchless Banking through the Business Correspondent model / Business Facilitator model. Accordingly, our Bank has proposed to do the Financial Inclusion through Business Correspondent model.
What are the Steps taken by our Bank in implementing the scheme?
Our bank has taken a series of steps for implementing the scheme which is as follows:
a) Identification / allotment of villages by State Level Bankers Committee (SLBC) where the population is more than 2,000. Subsequently, villages with population more than 5,000 also allotted by SLBC.
b) Survey formats have been printed and supplied to all the branches to conduct a baseline survey to find out the number of persons willing to open their savings accounts, their credit requirements, etc.,
c) Appointment of Business Correspondent Agents.
d) Appointment of vendor (Service provider) for Technology support for supply of Hand held devices (Micro ATM), Pinpad, smart cards and software.
Risk mitigation in this scheme
Banking transactions carried out through business correspondents entails operational, legal and reputation risks. The following measures have to be adapted to exercise control and effectively supervise operations being carried out by them.
a) Authentication: Customers have to present the card and affix their fingerprint to successfully complete a transaction.
b) Per Day transaction limit: Customers are facilitated to withdraw or deposit a maximum of Rs. 5,000/- per day through the Business Correspondents. A customer can remit or withdraw a minimum amount of Rs. 10/- and a maximum of Rs. 5,000/-.
c) Number of transactions: Customers are permitted to carry out a maximum of three transactions through Business Correspondents per day.
d) No. of Transactions limit for BC: Micro ATM working an online mode so that there is no restriction for BC transactions limit until the BC cash holding limit is expired.
e) Branch Level monitoring: The branch manager should also monitor the transactions of the BC through settlement account where all the Credit and Debit entries will be reflected in the account.
f) Visit Register: The Branch Manager should visit the village where the Business Correspondent is posted to check whether he / she is following our extant guidelines while providing financial services. This visit should be made once in a week and it should be properly recorded in the ledger maintained at the branch level with the necessary details.
Customer Grievance Redressal Mechanism
The branches will be provided with the notice board which will contain the name and address of the Grievance Redressal officers at different levels, and the time limit fixed for resolving the complaints at each level for the information of the customers. In case if the complaint is not resolved by the bank within the stipulated period of 30 days (Thirty days) they are at liberty to contact the Banking Ombudsman who’s address will also be given in the notice board.
The similar notice board will also be made available at the Business Correspondent’s place for the information of the general public.