An Overview on Financial Inclusion The objective of Financial Inclusion is to ex

tend financial services to the large hitherto unserved population of the country
to unlock its growth potential. In addition, it strives towards a more inclusiv
e growth by making financing available to the poor in particular. 2. Bank Branch
Network :
(a) Scheduled Commercial Banks branches (population group wise) as on 31st March
, 2012 :
Rural Branches 34,671 (37.02%)
Semi Urban Branches 24,133 (25.77%)
Urban Branches 18,056 (19.28%)
Metropolitan Branches 16,799 (17.93%)
Total 93,659
(b) Scheduled Commercial Banks branches (Bank category-wise) as on 31st March, 2
012 :
Public Sector Banks 64,805
Private Banks
Sector Foreign Banks 321
12,417
Regional Rural Total of Banks Commercial Banks 16,116 93,659
all
(c) Number of branches of Scheduled Commercial Banks opened according to group d
uring the period 1.04.2008 to 31.03.2012 :
population
Year 2007-08 2008-09 2009-10 2010-11 2011-12*
Rural 557 689 964 1185 990
Semi Urban 1237 1277 1691 `2099 1293
Urban 1247 1040 1381 864 570
Metropolitan 968 943 1104 931 557
Total 4009 3949 5140 5079 3410
*provisional data
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(d)
No. of villages and APPB:
Number of villages in India as per the 2001 Census Average Population per Bank B
ranch (APBB) as on 31.3.2012 (e) No. of bank branches of SCBs over the years:
600,000 (approx.) 12,921
Number of scheduled commercial bank branches as on 31st December, 1969 Number of
scheduled commercial bank branches as on 31st March, 1990 Number of scheduled c
ommercial bank branches as on 31st March, 2012 3. Opening of Bank Branches:
8,826 59,762 93,659
Government has been aggressively pursuing the expansion and strengthening of the
bank branch network in the country, thereby providing access to financial servi
ces to all strata of the society. In view of the continued need to set up the op
ening of branches in rural areas so as to meet the objectives of increasing bank
ing penetration and financial inclusion rapidly, Government issued detailed stra
tegy and guidelines on financial inclusion in
October 2011, vide which it was, inter-alia, advised to banks to open bank branc
hes by Sept 2012 in all habitations of 5,000 or more population in under banked
districts and 10,000 or more population in other districts. As per reports recei
ved from the Convener Banks of State Level Bankers Committees (SLBCs), of the 39
05 bank branches to be opened, 739 bank branches have been opened by end of Apri
l, 2012.
Regional Rural Banks (RRBs) were also advised to work out branch expansion plan
such that there is an increase of 10% in bank branches in 2011-12 and also in 20
12-13 over the respective previous years. branches during 2011-12. 13. As per pr
ovisional data received, RRBs opened 914
RRBs propose to open 1845 branches under the plan in 2012-
4.
Branch Authorisation Policy of RBI
(i)
RBI has permitted domestic Scheduled Commercial Banks (excluding RRBs) to open b
ranches in Tier 2 to Tier 6 Centres ( with population upto 99,999 as per census
2001) without the need to take permission from RBI in each case, subject to repo
rting. Page | 2 of 5
(ii)
RBI has also permitted SCBs (excluding RRBs) to open branches in rural, semi urb
an and urban centres in North Eastern States and Sikkim without having the need
to take permission from RBI in each case, subject to reporting.
(iii)
Domestic SCBs have been advised that while preparing their Annual Branch Expansi
on Plan (ABEP), they should allocate atleast 25% of the total number of branches
proposed to be opened during the year in unbanked Tier 5 and Tier 6 centres i.e
. (population upto 9999) centres which do not have a brick and mortar structure
of any SCB for customer based banking transactions.
(iv)
RBI has further stated that for each branch proposed to be opened in Tier 2 to T
ier 6 Centres of underbanked districts of underbanked states, excluding such of
the rural branches proposed to be opened in the unbanked centres that may be loc
ated in the underbanked districts of underbanked states, authorization for openi
ng of an additional branch in Tier 1 centre is provided as an incentive.
(v)
SCBs have also been permitted to operationalise mobile branches in Tier 3 to Tie
r 6 centres.
5.
Swabhimaan the Financial Inclusion Campaign In order to extend the reach of bankin
g to the rural hinterland, Banks were advised in
2010-11
to provide appropriate banking facilities to habitations having a population in
excess of 2000 (as per 2001 census) by March, 2012 under Swabhimaan campaign Smt.
Sonia Gandhi, Chairperson UPA, formally launched Swabhimaan the Financial Inclusio
n Campaign in February, 2011. Swabhimaan aims at providing branchless banking thro
ugh use of technology. Banks provide basic services like deposits, withdrawals a
nd remittances using the services of Business Correspondents. The initiative ena
bles Government
subsidies and social security benefits to be directly credited to the accounts o
f the beneficiaries and who would be able to draw the money from the Business Co
rrespondents in their village itself.
As per reports received from State Level Bankers Committee (SLBC) Convener Banks
, out of 74,398 such villages identified, 74,194 villages have been covered by M
arch, 2012. Further in terms of Finance Ministers Budget Speech 2012-13 it has be
en decided to extend the Swabhimaan campaign to habitations with population of mor
e than 1000 in North Eastern and hilly States and to other habitations which hav
e crossed population of 2,000 as per census 2011. Page | 3 of 5
Accordingly Banks have been advised to initiate steps for providing banking faci
lities in habitations with population of 1000-2000 in North Eastern and hilly St
ates and to habitations of 1600-2000 in all States/UTs by March, 2013.
Considering the population distribution in Andaman & Nicobar Islands, Chhattisga
rh, Daman & Diu, Lakshadweep, and Puducherry, all villages of population 1000 an
d above will also be provided BCA/branch by September, 2012. 6. Establishment of
Ultra Small Branches Considering the need of close supervision and mentoring of
the business
correspondent agents by the respective bank branch and to ensure that a range of
banking services are available to the residents of such villages, it has been d
ecided that Ultra Small Branch be set up in all villages covered through BCA und
er financial inclusion. Ultra Small Branch would comprise of a small area of 100
-200 sq. feet where the officer designated by the bank would be available with a
lap top on predetermined day and time in a week. While the cash services would
be offered by the BCA, the bank officer would offer other services to be offered
by the bank, undertake field verification and follow up the banking transaction
s. The BCA shall also operate from such premises. The periodicity and duration o
f visits can be progressively enhanced depending upon business potential and rev
iewed periodically.
7.
Banking Facilities in Unbanked Blocks
In order to provide banking facilities in unbanked blocks, the Government in Jul
y, 2009 identified 129 unbanked blocks, of which 91 blocks were in North East St
ates and 38 in other States. With the persistent efforts of the Government, the
number of unbanked banking facilities
blocks were brought down to 71 as on 31.3.2011, and by March 2012,
have been provided in all the unbanked blocks either through Brick and Mortar Br
anches or Business Correspondents Model or mobile banking. As a next step it has
been advised to cover all those blocks with BCA and Ultra Small Branch which ha
ve so far been covered by mobile banking only.
8.
Electronic Benefit Transfer Electronic benefit Transfer (EBT) is one of the prod
ucts offered under Financial
Inclusion in which benefits are directly credited into the account of beneficiar
y who can then withdraw it from the bank branch or the ATM or the Micro ATMs. Go
vernment in its strategy Page | 4 of 5
and guidelines on financial inclusion has advised banks that benefits in the are
as covered under Financial Inclusion must be transferred electronically into the
accounts of the beneficiaries. The Convener Banks of SLBC have been advised to
take up this matter in the SLBC meeting and the roadmap for Electronic Benefit T
ransfer in respect of each of the 32 scheme under which subsidies are provided b
y Central Government must be finalized. 9. Interoperability of BCAs:
The Department had taken up with RBI and NPCI the issue of interoperability at t
he level of BCAs. Two Pilot Projects in Mewat District of Haryana and Bulandshah
ar District of UP were implemented by Syndicate Bank and PNB respectively. Due t
o the persistent follow up by the Department, RBI has issued guidelines relating
to interoperability vide its letter dated 02.03.2012. Based on these guidelines
NPCI has also formulated the Standard Operating Procedures which have been circ
ulated by IBA to CEOs of all member banks.
Interoperability will enable a customer of a bank to conduct transactions though
BCA of not only his own bank but also BCA of any other bank also. It will also
ensure standardization of PoS devices and procedures in transactions though the
BC channel. This would also greatly benefit the common man as he/ she would be a
ble to transact through any BCA of any bank.
10.
GIS: A Geographical Information System (GIS) is being developed for mapping of a
ll the
branches in the country so as to enable the banks to determine the deficit areas
of banking. Pilots have already been done for Mewat and Bulandsahar districts.
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