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Mobile Technology in financial Inclusion

Financial Inclusion is the process of ensuring access to appropriate financial products and

services needed by all sections of the society in general and vulnerable groups such asweaker sections and low income groups in particular at an affordable cost in a fair and

transparent manner by mainstream institutional players.

In terms of scale, spread, costs, risks, and the inter-temporal nature of credit markets,

financial institutions and agents in India face formidable challenges in meeting the diverse

financial service needs of the countrys rural population. The banking system has grown

enormously in the last five years keeping pace with and in some cases leading the countrys

remarkable economic growth. Simultaneously, the banking system has improved its

strength, efficiency and resilience. There have also been significant improvements in thepayments and settlements system and electronic payments. At the same time, large number

of households continues to be excluded from the formal banking system and as per some

recent surveys their share has increased.

For financial inclusion to be a sustainable model, government agencies, banks, micro

financial institutions, and insurance companies and intermediaries are required to be given

support and motivation by the government. The problem of exclusion can be tackled by

banks and other organizations by recognizing that poor are bankable too unlike the current

terminals of big size defaults of from mortgage and credit cards business.

The present rural financial infrastructure comprises a wide variety of formal, semi-formal

and informal financial service providers, with distinctive cultures and characteristics. The

number of organisations and agents is very substantial : 33,553 rural and semi-urban

branches of commercial banks, 13,932 rural and semi-urban branches of Regional Rural

Banks, 1.09 lakh primary cooperatives, 1,000 NGO-MFIs and around 20 MFIs registered as

companies (Section 25) and nearly three million SHGs.

As per the 2008 Report on Financial Inclusion by Dr. C. Rangarajan, over 73 percent of

farmer households currently do not have access to formal sources of credit. The Committeealso suggested a National Rural Financial Inclusion Plan (NRFIP) to be launched with a clear

target to provide access to comprehensive financial services, including credit, to at least

50% of financially excluded households, say 55.77 million by 2012 through rural/semi-urban

branches of Commercial Banks and Regional Rural Banks. The remaining households, with

such shifts as may occur in the rural/urban population, have to be covered by 2015. Semi-

urban and rural branches of commercial banks and RRBs may set for themselves a minimum

target of covering 250 new cultivator and non-cultivator households per branch per annum,

with an emphasis on financing marginal farmers and poor non-cultivator households.

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The aim of the project is to:

Study the performance of nationalized banks on Financial Inclusion

1. Study the achievements of targets of financial inclusion as set by the RangarajanCommittee. Identify the success of banks. Also, Case studies.

2. Study the measures taken by various nationalized bank to improve financial literacy3. Study and compare the Product portfolio offered by various nationalized bank4. Identify the potential of business opportunity for banks in financial inclusion

Manish Kumar

(10927873)