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“A Study on Financial Inclusion - Empowering your Future Consumer”
Bachelor of Management Studies
Semester V
(2017-2018)

Submitted By
Mrunalini Pravin Bamankar
M
...
16

SIES (Nerul) COLLEGE OF ARTS,
SCIENCE & COMMERCE
Sri Chandrasekarendra Sawaswathy Vidyapuram Plot 1-C, Sector V,
Nerul, Navi Mumbai-400 706

“A Study on Financial Inclusion –
Empowering your Future Consumer”
Bachelor of Management Studies
Semester V

Submitted
In Partial Fulfilment of the
Requirements
For the Award of Degree of
Bachelor of Management Studies

By
Mrunalini Pravin Bamankar
M
...
16

SIES (Nerul) COLLEGE OF ARTS,
SCIENCE & COMMERCE
Sri Chandrasekarendra Sawaswathy Vidyapuram Plot 1-C, Sector V,
Nerul, Navi Mumbai-400 706

DECLARATION
I, Mrunalini Pravin Bamankar the student of T
...
B
...
S
...

The information submitted is true and original to the best of my knowledge
...
15
...
/Ms
...
15
...
M
...
, Semester V (2017-2018) has successfully completed the project on A study on
Financial Inclusion-Empowering Your Future Consumer under the Guidance of Prof
...


Couse Coordinator

Project Guide/ Internal Examiner

External Examiner

Principal

ACKNOWLEDGEMENT
To list who all helped me is difficult because they are so numerous and the depth is so
enormous
...

I take this opportunity to thank the University of Mumbai for giving me a chance to do this
project
...
Milind Vaidhya & my Vice Principal, Mrs
...

I take this opportunity to thank our Coordinator Prof
...

I would also like to express my sincere gratitude towards my project guide Prof
...

I would like to thank my College Library, for having provided various reference books and
magazines related to my project
...


CONTENT
SrSr
...


1

Executive Summary

7

2

Acronyms Used

9

3

Introduction of Financial Inclusion

10

4

Financial Inclusion in India

13

5

Review of Literature

41

6

Research Methodology

43

7

Classification & Tabulation of Data

47

8

Data Analysis & Interpretation of Data

55

9

Conclusion

58

10

Suggestion

59

11

Bibliography

60

Executive Summary
The present study advances the literature relevant to financial inclusion and micro finance, role
of financial institutions and their progress under micro finance
...
It is important to embrace
the financial excluded households, who require banking services more urgently and presently
remaining outside the scope of the banking system
...
With over 2 billion financially excluded people globally, addressing the complex and
deep-seated challenge of financial exclusion does not lend itself to simple solutions
...
It is not a preserve or
responsibility of one sector and will instead require game-changing innovations which more
often than not occur at the intersection of different sectors e
...
banking and telecom
...
Pursuit of financial inclusion by adoption of innovative
products and processes does, however, pose challenge for managing trade, -offs between the
objective of financial inclusion and financial stability
...
The underlying
belief is that only sound and strong institutions can promote financial inclusion in a sustainable
manner and, 206 towards this end, prudent regulations have to be in place to achieve inclusion
while protecting financial stability and consumer interest
...
Micro-credit intervention programme has
been well-recognized world over as an effective tool for poverty alleviation, improving socioeconomic conditions of rural poor and their sustainable development
...
SHG
movement has the potential to satisfy the financial service needs of India’s unbanked people in
scalable and sustainable manner which in turn leads to social and economic prosperity of
deprived sections
...
To fulfill the objectives related
to study and to assess the role of financial institutions in financial inclusion with special
reference to micro financing both the models prevalent in India i
...
SHG- Bank Linkage Model
and MFI-Bank Linkage model has been analysed
...
Role of financial Institutions comprising Commercial Banks, Regional Rural
Banks, Cooperative Banks and SIDBI has been figured out
...
It has also been
observed that major portion of lending to MFIs is comprised of lending by commercial banks
...
In India, there is a need for coordinated action amongst the
banks, the government and related agencies to 207 facilitate access to bank accounts to the
financially excluded
...
By expanding
financial inclusion, inclusive growth can be attained by achieving equity
...


Government

BC

Business Correspondents

BFs

Business Facilitators

ITC

Information and Communications
Technology

EBT

Electronic Benefit Transfer

KYC

Know Your Costumer

ATM

Automatic Teller Machine

GCC

General Credit Card

POPL
...


Rupees

FS

Financial Services

DP

Deputy Police

E Journal

Electronic Journal

MSMED

Micro, Small & Medium Entrepreneurship
Development

CAGR

Compound Annual Growth Rate

GDP

Gross Domestic Product

PMJDA

Pradhan Mantri Jan Dhan Yojana

MUDRA

Micro Units Development & Refinance
Agency Bank
...
1 Introduction
Financial Inclusion means providing financial services such as credit availability and banking
services to the economically weaker section of the society at affordable prices
...
Financial refers to all types of financial Services, including savings, payments and credit f
rom all types of formal financial institutions
...

In the Indian context, the term ‘financial inclusion’ was used for the first time in April 2005 in
the Annual Policy Statement presented by Y
...
Later on, this concept was widely used in India and abroad
...

Household access to financial services is depicted in Figure I
...
Raghuram Rajan), The essence of financial inclusion is to ensure delivery of financial ser

vices which include - bank accounts for savings and transactional 2 purposes, low cost credit f
or productive, personal and other purposes, financial advisory services, insurance facilities (lif
e and non-life) etc
...
2 Why Financial Inclusion?
Financial inclusion broadens the resource base of the financial system by developing a cultur
e of savings among large segment of rural population and plays its own role in the process of
economic development
...
Financial inclusion also mitigates the exploitation of vulnerable sections b
y the usurious money lenders by facilitating easy access to formal credit
...
28 in 2011-12 from 0
...
37 from 0
...


1
...

 To know why Financial Inclusion is important
...

 To understand the status of financial inclusion in India
...

 To understand the consumer thought process towards the upcoming financial instituti
ons
...
4 Scope of Research
Study was conducted in Navi Mumbai

1
...




Every aspect of financial inclusion has not been observed in the study
...




Due to conservative nature, it may be possible some respondents may not have given t
heir responses in the questionnaire in fully true manner
...


Chapter 2) Financial Inclusion in India
2
...

Financial Inclusion is:
NFA + Banks+ OFIs+ MFI+ IT = FI
Where,
FI - Financial Inclusion
NFA - No frills bank account
OFIs - Other Financial Institutions
MFI - Micro Financial Institutions
IT – Information Technology
Therefore, financial inclusion desirable for equal opportunities to all section of people in coun
try, inclusive growth, economic development, social development and business opportunity
...
2 History of Financial Inclusion (India)
Comprehensive Financial Inclusion incorporates ensuring access to financial services and ti
mely & adequate credit to the excluded sections i
...
weaker sections & low income groups
...
Exclusion of large segments of the society from financial services aff
ects the overall economic growth of a country
...

In the Indian context, the term ‘financial inclusion’ was used for the first time in April 2005in
the Annual Policy Statement presented by Venugopal Reddy, the then Governor, RBI
...


In the Khan Committee Report, the RBI exhorted the banks with a view to achieving greater f
inancial inclusion to make available a basic "no-frills" banking account
...
Financial inclusion again featured later in 2005 when it was used by K
...
Chakraborty, the c
hairman of Indian Bank
...
The bank asked the commercial banks in different r
egions to start a 100% financial inclusion campaign on a pilot

basis
...
RBI’s vision for 2020 is to open nearly 600 millio
n new customers' accounts and service them
...
To achieve this milestone, it’s important for both service providers and po
licy makers to have readily available information outlining gaps in access and interactive tool
s that help better understand the context at the district level
...
3 Financial Inclusion in India – An Assessment
“Overcoming poverty is not a gesture of charity
...
It is the protection of a
fundamental human right, the right to dignity and a decent life
...
Sometimes it falls upon a generation to be great
...
Let your greatness blossom
...
But not to do this
would be a crime against humanity, against which I ask all humanity now to rise up
...
”
- Franklin D
...
”
- Mahatma Gandhi

If the misery of the poor be caused not by the laws of nature, but by our institutions, great is
our sin
...
4 Importance of Financial Inclusion
1
...
Financial inclusion not only helps individuals and families, but collectively it develops entire
communities and can help drive economic growth
3
...
Participation within the financial system leads to all kinds of individual benefits, including:
•

Ability to start and grow a business, which gives people an opportunity through
micro-financing schemes for example to better long term prospects

•

Being able to pay for an education for children, which in turn enables a new
generation of educated and informed individuals

•

The ability to handle uncertainties that require ad hoc and unexpected payments or
‘financial shocks’

5
...
This in
turn promotes:
•

Investment within the community, provides jobs and again research shows that
employment boosts status, income and one’s outlook on life
...


•

Equality both within the community and within families
...
Financial inclusion is important as it enables to reduce the gap between rich and poor
population
...
5 Scope of Financial Inclusion
Financial Inclusion should include access to financial products and services like,


Bank accounts - check in account



Immediate Credit



Savings products



Insurance
...
6 Initiative by Govt
...
Some of these steps are:
Opening of no-frills accounts:
Basic banking no-frills account is with nil or very low minimum balance as well as charges
that make such accounts accessible to vast sections of the population
...

Relaxation on know-your-customer (KYC) norms:
KYC requirements for opening bank accounts were relaxed for small accounts in August 2005,
it mean that an account holder details of Name, Address and Aadhar Number must be present
...
The BC model allows banks to
provide doorstep delivery of services, especially cash in-cash out transactions, thus addressing
the last-mile problem
...

Adoption of EBT:
Banks have been advised to implement EBT by leveraging ICT-based banking through BCs
to transfer social benefits electronically to the bank account of the beneficiary and deliver
government benefits to the doorstep of the beneficiary, thus reducing dependence on cash and
lowering transaction costs
...
The objective of the scheme is to provide hassle-free credit
to banks’ customers based on the assessment of cash flow without insistence on security,
purpose or end use of the credit
...

Opening of branches in unbanked rural centres: To further step up the opening of branches
in rural areas so as to improve banking penetration and financial inclusion rapidly, the need for
the opening of more bricks and mortar branches, besides the use of BCs, was felt
...

Recent Measures –
•

Licensing of New Banks:

The present round of licensing new banks is essentially aimed at giving further fillip to
financial inclusion efforts in our country
...
Financial inclusion plan would be an important criterion for procuring
new bank licenses (Dr
...

•

Discussion Paper on Banking Structure in India – The Way Forward:

The RBI has put out a discussion paper in August 2013 on Banking Structure for public
comments
...
The
subject of licensing ‘small banks and financial inclusion’ has been discussed therein
...

•

In this context, it needs to be mentioned that Urban Co-operative Banks (UCBs),
Regional Rural Banks (RRBs) and Local Area Banks (LABs) numbering 1606, 64, and
4 respectively are, in fact, Small Finance Banks operating in this country
...
Furthermore, we have around 12,225 NBFCs
as on March 2013, which could be conceptually construed as semi-banks undertaking
predominantly credit/investment activities
...
7 Progress in Financial Inclusion
Progress of financial inclusion since the launch of financial inclusion plans clearly indicates
that banks are progressing in areas like opening of banking outlets, deploying BCs, opening of
BSBD accounts, grant of credit through KCCs and GCCs
...

Number of Branches Opened (including RRBs) ™ Due to RBI’s concerted efforts since 2005,
the number of branches of Scheduled Commercial Banks increased manifold from 68,681 in
March 2006 to 1,02,343 in March 2013, spread across length and breadth of the country (Chart
4)
...
As compared with rural areas, number of branches in semi-urban areas
increased more rapidly
...


Total Bank Outlets (including RRBs)
Total number of banking outlets in villages increased from 67,694 in March 2010 to 2,68,454
in March 2013 (increased around 4 times during the period of three years)
...
5 times)
...
45 million in March 2010 to 182
...


RBI advised banks to provide small overdrafts in BSBD accounts
...
95 million BSBD accounts availed 10 OD facility of Rs
...
55 billion (These figures
respectively, were 0
...
10 billion in March 2010)
...

Up to March 2013, the total number of KCCs issued to farmers remained at 33
...
2622
...


General Credit Cards (GCC) Issued:

Banks have been advised to introduce General Credit Card facility up to Rs
...
Up to March 2013, banks had provided credit aggregating to
Rs
...
34 billion in 3
...


ICT Based Accounts - through BCs 11
To provide efficient and cost-effective banking services in the un-banked and remote corners
of the country, RBI directed commercial banks to provide ICT based banking services –
through BCs
...

The number of ICT-based transactions through BCs increased from 26
...
46 million in March 2013, while transactions amount increased steadily from
Rs
...
92 billion to Rs
...
88billion during the same period (Chart 9)
...
6% during March 2010 to
March 2013
...


2
...
While financial inclusion works from supply side of
providing access to various financial services, financial education feeds the demand side by
promoting awareness among the people regarding the needs and benefits of financial services
offered by banks and other institutions
...


Financial Stability Development Council (FSDC) has explicit mandate to focus on financial
inclusion and financial literacy simultaneously
...

Growth in SHG-Bank Linkage:
This model helps in bringing more people under sustainable development in a cost-effective
manner within a short span of time
...
46 million saving
linked SHGs with aggregate savings of Rs
...
16 billion and 1
...
145
...

Growth of MFIs:
Though RBI has adopted the bank-led model for achieving financial inclusion, certain NBFCs
which were supplementing financial inclusion efforts at the ground level, specializing in micro
credit have been recognized as a separate category of NBFCs as NBFC-MFIs
...
Their asset size has progressively
increased to reach Rs
...

Bank Credit to MSME10:
MSME sector which has large employment potential of 59
...
1 million
enterprises, is considered as an engine for economic growth and promoting financial inclusion
in rural areas
...

Bank credit to MSME sector witnessed a CAGR of 31
...
Of total credit to MSME, public sector banks contributed the major share of 76%,
while private sector banks accounted for 20
...
8% as
on March 31, 2012 (Chart 11)
...
32 in 2000-01 to 5
...
The life insurance
penetration as a percentage of GDP stood at 4
...
71 during the same period12
...

Equity Penetration in the Country
The number of investor accounts accounted for a meagre 1
...


2
...
Reportedly, these pioneering projects
have brought about vast improvement in the lives of the participants and set the tone for
economic development in their command areas; which is a pre-requisite for Financial Inclusion
efforts to be undertaken by the banking system
...
10 Financial Inclusion Index

On June 25, 2013, CRISIL, India's leading credit rating and research company launched an
index to measure the status of financial inclusion in India
...
Chidambaram at a widely covered
program at New Delhi
...
CRISIL Inclusive is a relative index
on a scale of 0 to 100, and combines three critical parameters of basic banking services—
branch penetration, deposit penetration, and credit penetration—into one metric
...
It contains the first regional,
state-wise, and district-wise assessments of financial inclusion ever published, and the first
analysis of trends in inclusion over a three-year timeframe
...
1 is low, though there are clear signs of
progress– this score has improved from 35
...


•

Deposit penetration is the key driver of financial inclusion– the number of savings
accounts (624 million), is almost four times the number of loan accounts (160 million)
...


•

The top three states and Union Territories are Puducherry, Chandigarh, and Kerala; the
top

three

districts

are

Pathanamthitta

(Kerala),

Karaikal

(Puducherry),

and

Thiruvananthapuram (Kerala)
...
11 Challenges to Financial Inclusion
•

There have been some recent reports of malpractices with respect to Jan Dhan accounts
...


•

In India, where nearly one-fourth of population is illiterate and below the poverty line,
ensuring financial inclusion is a challenge
...
Rural poverty is above 30 per cent of
population in places such as Assam, Bihar, Madhya Pradesh, Uttar Pradesh, Orissa,
Jharkhand, Chhattisgarh, and Manipur
...
Thus, ensuring deposit operations in these accounts is a challenge
...
The banks have devised ways to address limitations arising
out of illiteracy by ensuring biometric access to bank accounts
...


•

In each of the above cases, the privacy of an individual’s bank balance is breached
...
Therefore, a financial inclusion strategy sensitive to
regional, demographic and gender related factors, needs to be carefully crafted
...
This could
be, in addition to poverty and illiteracy, due to the type of products being offered to the
unbanked population
...


Making Accounts Operational
The opening of PMJDA was a mammoth task, as in March 2014 just before PMJDA, total
accounts on books of commercial banks were around 1 lakh crore
...

The next challenge is monitoring existing borrower accounts
...
There is a need to fix responsibility on a single regulatory
authority to ensure that JDAs are operational
...
NABARD
may not have the existing capacity, as of now, to accept the challenge but can certainly be
prepared in a phased manner in next few years
...


2
...
The result was consumers becoming quickly over-indebted to the point of committing
suicide, lending institutions saw repayment rates collapse after politicians in one of the
country's largest states called on borrowers to stop paying back their loans, threatening the
existence of the entire 4 billion a year Indian microcredit industry
...

The challenge for those working in the financial inclusion field has been to separate microcredit as only one aspect of the larger financial inclusion efforts and use the Indian crisis as an
example of the importance of having the appropriate regulatory and educational policy
framework in place
...
13 Financial Inclusion - Who are these people?


Underprivileged section in rural and urban areas like-Farmers, small vendors, etc



Agricultural and Industrial labourers



People engaged in un-un-organised sector



Unemployed



Women



Children



Old people



Physically challenged people

2
...
This was done to make financial services
such as banking, insurance, and others available to the Indian citizens especially from the low
& middle class category at an affordable cost and make them financially secure
...
So let’s check
out the various financial inclusion schemes in the form of insurance, pension, savings account
and others which were launched:
Pradhan Mantri Suraksha Bima Yojana:
Considered to be the cheapest accidental death cum disability insurance policy with an annual
premium of just Rs
...

Although the insurance cover is small which is Rs
...
1,
00, 000 for partial disability but considering the fact that nearly 80% of the country’s
population do not have any insurance, the scheme has evoked a very good response as it will
further increase the insurance penetration to the remotest locations of India
...
But
this has become possible with Suraksha Bima
...


Pradhan Mantri Jeevan Jyoti Bima Yojana:
Similar to PMSBY, PMJJBY is also the cheapest life insurance policy with an annual premium
of Rs
...
The cover offered under the
yojana is Rs
...

Objective of both PMJJBY and PMSBY is to provide financial security to the family of policy
holder in an event of his/her death
...
Contribution can be
done monthly/quarterly/every 6 month and equal amount will be contributed by the
government of India with an option to prematurely exit from the scheme before the age of 60
years
...
1,000-Rs
...
Detailed
information on APY is available here
...
Through this yojana, brothers can gift social security schemes to their sisters by
purchasing gift card worth Rs
...
201 which will be used for
making the premium payment for Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana
...
5001 can also be taken which will serve two purposes
– premium payment for PMSBY and PMJJBY for the first year and remaining money would
be investment for term deposit for 10 years
...


Sukanya Samriddhi Yojana:
With a mission to secure the financial future of the girl child, this small savings scheme SSA
– was launched under the Beti Padhao Beti Bachao initiative
...
e
...
2%
...
g
...
20,000 for 14
years, the maturity amount will be Rs
...
2% interest)
...

Pradhan Mantri Jan Dhan Yojana:
Indian Prime Minister Narendra Modi announced this scheme for comprehensive financial
inclusion on his first Independence Day speech on 15 August 2014
...
5000 after six months
and Repay Debit card with inbuilt accident insurance cover of Rs
...
will also be added
...
5 crore (75 million) households and to open
their accounts
...

On the inauguration day of the scheme, 1
...


2
...
5000 and RuPay Debit card with inbuilt accident insurance cover of Rs
...
In addition, in this phase, coverage of house
holds in hilly, tribal and difficult areas would be carried out
...


2
...
It is proposed to encourage Public-Private partnerships
...
The existing national infrastructure
of post offices if they agree to become BCs of banks or can offer debit cards from post offices
and the proposed setting up of payment banks would be optimally utilized to deliver the result
s
...


• The strategy is to take forward the Business Correspondent model for expansion of banking
services by modifying it to ensure both operational flexibility and viability of the BC Agents
Convergence with the National Rural Livelihood Mission (NRLM) in rural areas and Nationa
l Urban Livelihood Mission (NULM) in urban areas would be sought for in covering each hou
sehold with bank accounts
...
Department of Telecom has been requested to ensure that problems of
poor and no connectivity are resolved
...
93 lakh inhabited vi
llages in the country (2011 census) only about 50,000 villages are not covered with Telecom c
onnectivity
...
17 Financial Exclusion
The term financial exclusion came into prominence in the early 90’s
...


ARTICLE (Hindustan Times – August 2015)
The extent of India's financial exclusion is staggering
Ever since former Reserve Bank of India Governor, Dr
...
The 11th Five Year Plan (2007-12) documented that significant
segments of the Indian population had been excluded from the growth over the previous decade
and called financial inclusion a top priority
...
YV Reddy mentioned the words
“financial inclusion” in his 2005 speech, the words became common parlance in the
government and at the RBI
...

The extent of financial exclusion remains staggering
...
Till recently, more than 50% of India’s

population did not have any bank account and more than half of the total farmer households
did not seek credit from either institutional or non-institutional sources of any kind
...
The
first major initiative was taken in 1955 when the Imperial Bank of India was nationalised to
what became the State Bank of India
...

Several measures were taken in subsequent years, such as mandating banks to lend to smallscale industries, agriculture sector and to small borrowers; opening of bank branches in rural
areas; introduction of Lead Bank Scheme; the 20- Point Economic Programme and the
Integrated Rural Development Programme
...
As per the findings of RBI’s
2009 High Level Committee, the Lead Bank Scheme has been a failure since a large section of
the rural population and the urban poor do not have access to banking facilities
...
In
the name of reforms, banks have been allowed to close rural branches
...
But of the new
17 crore Jan Dhan accounts, almost 50% are non-operational
...
The committee must consider reviving the core mission of public sector
banks — to serve rural, unbanked areas, lend to the poor at affordable interest rates and disband
agents who charge usurious rates
...


ARTICLE (Economic Times – August 2017)
JAM revolution to end financial exclusion: Arun Jaitley
NEW DELHI: Finance minister Arun Jaitley has said India is within the reach of '1 billion-1
billion-1 billion' vision of financial inclusion, recounting the success of three-year old plan that
began with an ambitious attempt to bring formal banking to every household
...
Once that is done, all of India can become part of the financial and digital main
stream, “Jaitley said in a Facebook post on Sunday on the third anniversary of the Pradhan
Mantri Jan Dhan Yojana (PMJDY)
...

Jailtey said that while the scheme aimed at providing financial services to the poor — bank
accounts, electronic means of payment (via RUPAY cards), and ability to avail credit and
insurance — the underlying vision was much broader…


...
India's poor would not only be able to overcome their economic deprivation but they would
also become an integral part of the social main stream," he wrote
...
About 52
...
62 crore accounts in India
...

"Every month now, about 7 crore successful payments are made by the poor using their
Aadhaar identification," he said
...

"Now with the BHIM app and the Unified Payments Interface (UPI), JAM can become fully
operational," Jaitley said adding it will allow poor to become part of digital mainstream through
this secure and seamless payments infrastructure
...


Besides, the government will also be legitimised and strengthened because it can transfer
resources to citizens faster and more reliably and with less leakage, he said
...
No Indian will be
outside the mainstream," the finance minister said
...
18 Current State of FI
A new paradigm for financial inclusion
Finance is the glue that holds all pieces of our life together
...
This
philosophy is known as financial inclusion
...

These tools enable them to save and to responsibly borrow - allowing them to build their assets
and improve their livelihoods
...
These are the people who must
be brought into the orbit of formal finance
...
But opening an account does not ensure the account is used
...
But owning a phone
or even opening a digital account does not ensure the account is used
...

India remains among the most cash-intensive economies in the world, with a cash-to-GDP ratio
of 12 percent
...

In a digital world, safety and security is important for everyone
...
Payment providers can put in
the most fool proof systems in the world but the human element of payments and hence actions
resulting in fraud cannot be emphasised enough
...

In India, financial inclusion received a steroidal boost with Prime Minister’s Jan Dhan Yojana
(PMJDY)
...
But a
disquieting feature is that public banks, regional rural banks (RRBs) and 13 private lenders

have reported that as on 24 March 2017, 92,52,609 accounts were frozen under the PMJDY
owing to inactivity
...

Lack of Literacy
Merely opening physical accounts as flag posts of financial identity won’t help unless they are
actively used by people for managing their money
...

This skill is known as financial literacy
...

According to a global survey by Standard & Poor’s, less than 25 per cent of adults are
financially literate in South Asian countries
...
India is home to 17
...

On account of lack of proper awareness and failure of institutions to properly guide them,
people buy insurance policies without proper planning and give up midway because they don’t
have money to pay the premium
...

The customers end up losing heavily as penalties are very harsh
...
This means: one year after the sale, only 61 out of every 100
policies were renewed
...
Five years after being bought, two-thirds of the life insurance policies
are no more
...


Address Real Pains
It has been found that financial education programmes focused on just imparting knowledge
rarely deliver unless they are backed by a suitable product, including the support to use the
product
...

Some banks use a decision tree to help customers open the saving accounts that match their
needs
...

Similarly, in one model, a bank undertook a project to deliver financial education training to
young women in rural communities through a cascade training model where core trainers
trained peer educators, who in turn trained community members
...

To use financial services to their full potential, the low-income people need products well
suited to their needs and appropriate training and education for adapting to these financial
services
...

The issue is lot more nuanced than what we see today
...

Consumers will come into the formal financial sector and embrace the new opportunities
believing that if they change their behaviour and exert the effort to get into the new world then
certain specific pains will disappear
...


ARTICLE (Zee News - August 2017)
PMJDY initiated financial inclusion, unleased JAM revolution: Arun Jaitley
JAM, a term coined, and a vision conceptualised, by our Chief Economic Advisor, is nothing
short of a social revolution, because it has brought together financial inclusion (PMJDY),
biometric identification (Aadhar) and mobile telecommunications
...

The PMJDY and the other schemes were not only the first step towards financial inclusion and
providing security to the poor, but these initiatives also unleashed the "JAM" (Jan Dhan,
Aadhar, Mobile) revolution, Jaitley said in his blog
...

Today, about 52
...
62 crore accounts in India,
the Union Finance Minister said
...
Every month now, about seven crore
successful payments are made by the poor using their Aadhar identification
...
Total PMJDY accounts
opened increased from 12
...
52 crore as of August 16, 2017
...
54 crore in January
2015 to 17
...

Number of RuPay cards issued increased from 11
...
71 crore as
of August 16, 2017
...
65,844
...
837 in January 2015 to Rs
...


Zero balance accounts under the PMJDY declined from 76
...
41 per cent in August 2017
...
69
crore accounts
...

This includes 14
...
65
crore women`s accounts
...

Jaitley also said that the government has taken steps to provide security to the poor via life
insurance under the PMJJBY and the accident insurance Pradhan Mantra Suraksha Bema
Yojana (PMSBY)
...
46 crore under the
PMJJBY and 10
...
In both schemes, close to 40 per cent of the enrolees
are women
...

As on August 18 this year, Rs
...
66 lakh crore have been distributed to 8
...

Above all, the government now makes direct transfer of Rs
...
6000 crores per month
...

Now, with the BHIM app and the Unified Payments Interface (UPI), the JAM can become fully
operational
...


''The JAM social revolution offers substantial benefits for the government, the economy and
especially the poor
...
Government finances will be improved because of the reduced subsidy
burden; at the same time, government will also be legitimised and strengthened because it can
transfer resources to citizens faster and more reliably and with less leakage," Jaitley added
...
That is 1
billion unique Aadhaar numbers linked to 1 billion bank accounts and 1 billion mobile phones
...
"
"Just as the Goods and Service Tax (GST) created one tax, one market, one India, the PMJDY
and the JAM revolution can link all Indians into one common financial, economic, and digital
space
...
This is nothing short of a social revolution,"
Jaitley concluded
...
Parul
Agarwal which was published in ISOR Journal of Business & Management (ISOR-JBM),
Volume 16, Issue 6 ver
...
And this study also focuses on approaches
adopted by various Indian Banks towards achieving the goal of financial inclusion for inclusive
growth in India
...
K Chakrabarty, (DG of the
RBI), at The Federation of Indian Chambers of Commerce & Industry (FICCI) Seminar
...
It also states about the challenges which are going to face soon by banks
...
8
...

This paper summarizes the first publicly available, user-side data set of indicators that
measure how adults in 148 countries save, borrow, make payment, and manages risk
...

“Role of Banks in Promoting FI in India” by Shahan Khan which was published in
ASM’s International E-Journal of Ongoing Research in Management & IT
...
It is found that
despite various efforts by the govt
...

“CRISIL, Inclusix” an initiative developed by CRISIL with support from Ministry of
Finance, GOI and RBI published at June,2013
...
CRISIL Inclusix is India’s first comprehensive
measure of FI in the form of an index
...

CRISIL evaluates FI at the national, state, district level visa -versa defined ideal
...


Chapter 4) Research Methodology
The Project aims at understanding the level of awareness & achievement of RBI and GOIs eff
orts in achieving the dream target financial inclusion
...
This research work started with exploratory design, in due cou
rse of time it was converted to casual research design
...
1 Primary Data
Primary Data is a term for data collected on source which has not been subjected to processin
g or any other manipulation, it is also known as Raw Data
...

100 people were randomly surveyed regarding financial inclusion through a well-constructed
questionnaire
...
I insist to fill the questionnaire which are made by me & generating information a
bout their banking facilities they are using and to know if they are aware of facilities that are p
rovided by RBI & GOIs
...
2 Secondary Data
Secondary Data is collected by someone other than the users, Common sources of secondary d
ata for social science include books, research papers, annual report, internet etc
...
3 Hypothesis
Null Hypotheses
Employment Status and Financial Inclusion/Exclusion:
H01: There is no significant association between occupation and availing of loan services
...

H03: There is no significant association between occupation and availing of Insurance services
...

Education and Financial Inclusion/Exclusion:
H05: There is no significant association between education and availing of loan services
...

H07: There is no significant association between education and availing of Insurance services
...

Income and Financial Inclusion/Exclusion:

H09: There is no significant association between income and availing of loan services
...

H11: There is no significant association between income and availing of Insurance services
...

Bank employees and Financial Inclusion/Exclusion:
H13: There is no significant association between bank employees ‘attitude and overall
satisfaction level with the banking services on financial inclusion/exclusion
...

H15: There is no significant association of banks charges/rates and availing of loan services
financial inclusion/exclusion
...

Relationship of overall satisfaction with banking services and financial inclusion/exclusion:
H17: Relationship of overall satisfaction with banking services does not have significant
impact on financial inclusion and exclusion
...
4 Questionnaire
1
...
Gender
3
...
Do you have a bank A/C?
5
...
Which type of A/C do you have?
7
...
How frequently do you save in your A/C?
9
...
Have you ever borrowed or taken a loan?
11
...
How did you find that banks were opening “No Frill” A/C?
13
...
Are you using any type of financial services or product?
15
...
Over a past couple of years have you been anywhere for taking advice about money m
atters?
17
...
What would you do if you needed money in emergency?

Chapter 5) Classification & Tabulation of Data
1
...
Occupation

3
...
Number of A/Cs in your Household?

5
...
Who helped you to opened the A/C?

7
...
If you don’t have a bank A/C then reason for refusing bank A/C?

Reason
other
28%

money problem
39%

money problem &
incomplette doc
...


9
...

16%
money problem & incomplette doc
...
Do you think that a bank A/C can be opened with Zero Balance?

RESPONSE
Positive

Negative

4th Qtr

30%

70%

11
...
If borrowed what was the type of Credit/Loan

13
...
Have you purchased any type of insurance scheme?

Insurance

49%

51%

Yes

No

15
...
What would you do if you needed money in emergency?

Response
15%

10%
50%
15%

10%

Moneylenders

Bank

Atm

Loan

Other

Chapter 6) Data Analysis & Interpretation of Data
•

Do you have a bank A/C?

Out of 100 respondents 80% are having a bank a/c where as 20% are not having bank A/C
...
e
...


•

Who helped you to opened the A/C?

The Majority of sample population responded that their family member help them to open the
bank A/C
...
There are some who save half-yearly
or yearly
...

•

If you don’t have a bank A/C then reason for refusing bank A/C?

While doing survey I meet some people who don’t have bank A/C, due the following reason:
39% don’t have A/C due to Money Problem, 28% don’t have A/C due to their personal intere
st, 17% due to Money Problem & incomplete document, 16% due to incomplete document
...


•

Do you think that a bank A/C can be opened with Zero Balance?

70% of the sample population response was positive and they think it was a good effort by RB
I & GOIs While 30% of the sample population response was negative as they don’t know wha
t is Zero Balance
...


•

If borrowed what was the type of Credit/Loan

Most of the sample population has taken the different types of Loan
...


•

Are you using any type of financial services or product?

42% of the sample respondents are using financial insurance while 58% don’t use
...


•

What would you do if you needed money in emergency?

15% of the sample population would take money from Moneylender, 10% of the sample popu
lation would take money from Bank, 15% of the sample population withdraw the money from
ATM, 10% of the sample population would take Loan, 50% (Other) of the sample population
would take money from: Parents, Friends, Husband or by Selling Gold, Securities etc
...


•

While doing survey it was found that people are voluntarily excluding themselves from
banking system, most of them do not have bank A/cs
...
Hence it needs to be advertised
...
Where the amount to be borrowed is generally small,
the people found to hesitated to approach banks, whereas for other productive purposes
they borrow from
...


•

RBI & GOI should take some measures so people who stay in rural area or in slums
can take the benefit of Zero Balance A/c & No Frill A/c
...


•

Still there are some scope of expansion in branches so it is suggested that share of
private sector banks can be expanded
...


•

It means banks can tie-up with India Post to utilize their extensive network by setting
up small banking counters at each of their post offices, especially rural branches
...
owned post offices have sufficient space in the post offices to set up such counter
with a computer and printer, to be operated by a commercial bank employee
...


•

Financial Literacy needs to be given importance in school’s education, and student
small saving programs, where bankers visit schools & collect small deposits, need to
be revived
...


•

There is a need to have granular schemes, preferably different schemes for rural and
urban area and also for slum area
...


Bibliography
https://rbidocs
...
org
...
pdf
http://www
...
com/opinion/jan-dhan-yojana-fraud-should-becurbed/article9169214
...
thehindubusinessline
...
ece
https://en
...
org/wiki/Financial_inclusion
http://www
...
com/terms/f/financial-inclusion
...
allbankingsolutions
...
htm
http://economictimes
...
com/industry/banking/finance/banking/all-youshould-know-about-financial-inclusion/articleshow/50387778

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