Financial Financial InclusionInclusion

Innovations & Initiatives

What is Financial InclusionWhat is Financial Inclusion

Financial Inclusion is a comprehensive and holistic process of ensuring access to financial services by all the people in a fair, transparent and equitable manner at affordable cost.

Nearly 60% of the population in Odisha do not have access to the basic financial services.

Need for making banking and payment services available to the entire population at affordable cost and without discrimination.

The financial inclusion helps people to benefit from the overall socio-economic growth and development of the State.

Empowering people to take their financial decisions in the best possible way for themselves.

Why Financial Inclusion Why Financial Inclusion (FI)(FI)

Benefits of encouraging Financial InclusionBenefits of encouraging Financial Inclusion

To the Customer:Affordable access to banking services practically at the doorstep

Availability of Govt Benefits direct in bank accounts

Loans and Remittance Facility (Migrants)

Surplus income Saving/Safety-

Empowerment of women

Release from the clutches of local money lenders

Improvement in Economic status.

Improved financial literacy

To BC

Employment opportunity

Opportunity to expand existing business

Ride on the Brand name of the Bank

Respectable Image in society

Customer base for its own activities other than banking activities

To Bank:Increase Outreach

Increase Customers Base

Improving Market share

Potential business

Low investment outlets/low transaction cost

Low cost CASA deposits

Corporate Social Responsibility

To Govt:Reaching out to unbanked population.

Inculcating saving /banking habit

Reducing migration to urban centres

Speeding up economic development

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Availability – Point of presence & Choice of products

Awareness – Information, Education, Communication

Acceptability – Value desired by the customers

Affordability – Value for money

Accessibility – Convenience, lower entry thresholds

5 A’s of Financial Inclusion

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● Liberalised KYC norms● Allowing engagement of BC/BF by banks for

providing the last mile banking and financial services.

● Liberalised branch opening by relaxing branch licensing policy.

● Introduction of new banking products such as “No-frills” accounts (Basic Savings Bank Deposit Accounts), Small SB Accounts, loan products like GCC, KCC.

Initiatives to facilitate FIInitiatives to facilitate FI

● Covered 833 villages with population >2000 by March 2013.

● 2685 villages with population below 2000 have been covered till end of December 2013.

● 2775 more villages will be covered by March 2014.

● Opened 588 rural and semi-urban branches to reach hinterland of Odisha.

● Have plans to open 27 more branches in unbanked villages by March 2014.

● More than 800 CSPs of SBI are also operating in villages. 1000 more will be opened by March 2015

FIP Initiatives of SBI in FIP Initiatives of SBI in OdishaOdisha

Financial Financial InclusionInclusion

Coverage of unbanked villagesMicro

Credit

Activate inactive CSPs /

Accounts

Setting up of Branches/CSPs/ATMs

Account opening & Aadhaar Seeding of DBT/DBTL

beneficiaries

Improvement in

Transactions in BC channel

accounts ATM Cards to DBT beneficiaries/FI /KCCs customers

Spread Financial Literacy/

Awareness

Financial Inclusion: Current Thrust

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Challenges

Technology

BC Channel

Viability of BC channel Engaging CSPs in small villages remains unviable. Acceptability of BC model in rural masses.Many BC outlets are inactive.Attrition of CSPs.Around 60% of accounts opened through BC channel are inoperative

Scalability and sustainability (Business Continuity, Disaster Recovery, etc.)Technology upgradation is happening at faster pace but the functionality of BC delivery platform at front-end has to be simple and user friendly. Managing multiple and evolving technologies involves cost

Viability Issues

Low Business Volume Low transactions value Higher capital expenditure in technology & BC

roll out. Overall, Viability remains critical in low potential

centres.

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Challenges - Continued

Network connectivity in many villages is very poor or erratic.Stable supply of electricity for operationsLaw and order position in certain parts of the State. 14 backward/Left Wing Extremism (LWE) affected district in SBI’s area of operations.

Infrastructure

SHG Credit linkage

SHGs formation slowing down Micro Finance Institutions (MFIs) are slowly adjusting to regulatory framework

DBTSlow progress in Aadhaar enrolment and seeding of accounts.

Operational Risk

Risks associated with outsourcing Reputation risk (for poor/discontinued service,

frauds, mis-selling)

OthersCash Management Cost of movement of Cash Risk associated with movement and retention of cash

Financial Literacy is having basic knowledge of managing one’s own money and developing thrift habits.

‘A rupee saved is a rupee earned.” A person who is financially literate can spend

wisely, use scarce resources more effectively.We have 19 FLCs in the state to impart the

knowledge of the need for and benefits of saving in the formal financial system.

Conducted 281 programmes for 10373 villagers.

Conducted audio-visual shows highlighting the risky nature of chitfund and why formal financial institutions should be preferred for saving.

Financial Learning CentresFinancial Learning Centres

F I F I productproduct

ss

SB cum OD

Recurring Deposit

Micro Credit

Remittances

Tatkal (non-home transactions)

Micro Insurance

Fixed Deposit

FI Products through BCs

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● Internet based Kiosk Banking platform for real-time transactions.

● Micro ATM or “Cash at POS” operating on GPRS. Already 443 of such POS machines are in use by the BCs of the Bank. Also issued so far 55600 RuPay FI debit cards for use in ATMs and POS machines.

● Mobile phone based handheld devices for banking services.

● Personal Accident Insurance cover at reasonable cost.

Extensive use of ICT by SBIExtensive use of ICT by SBI

Cash at POSCash at POS

Debit card and POS Debit card and POS machinemachine

Kiosk Banking & POS- Kiosk Banking & POS- AccessoriesAccessories

FI Activity thru Br & BC channel

MARCH ’11

MARCH ’12

MARCH ’13

DEC ’13

No. of accounts (000)

1096 1413 1711 2040

% growth - 28.9 21.1 25.6 (annualise

d)

Balance in lacs

4596 3552 5344 9593

% growth - (-)22.7 50.5 79.5

Achievement of SBI in Achievement of SBI in OdishaOdisha

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