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Financial Inclusion - Definition

Financial Inclusion - Definition. “Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost .”.

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Financial Inclusion - Definition

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  1. Financial Inclusion - Definition “Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.”

  2. Financial Services to be offered • No-frill accounts • OD facility in no-frill account • Term Deposit/Recurring Deposit • Small Credit (OGSC, OGC, GCC etc.) • Insurance • Remittance

  3. Delivery of services throgh Technology under branchless model Use of Smart card/ bio-metric card based technology through engagement of technology service provider. Operational flow chart :- • Capturing customer’s personal details & AOF in soft form. • Uploading customer’s master file on technology provider’s system • Verification & KYC compliance by branch. • Opening of account. • Activation of Card for transactions.

  4. Delivery of services throgh Technology under branchless model • Transactions using hand held devices (POS) in villages • Customer authentication through his/ her digitals on POS • POS becomes ready for transaction by inserting/swiping the bio-metric card. • Cash transaction carried out • Transaction transmitted to BC’s server through GPRS/ TCP/ IP protocol. • Day’s transactions are forwarded to bank’s server. • Transaction gets reflected in respective accounts the following day. • Thus Transaction cycle completes in 24 hours.

  5. No FRILLS ACCOUNT • Initial deposit – with zero balance. • Balance not to exceed Rs.50000/- in all accounts taken together. • Total credits in a/c not to exceed Rs.2 lac in a year. • Simplified KYC procedure. • ATM Card facility allowed with nil annual charges. • Provision for over draft facility.

  6. Oriental GrameenSwarojgar Card (A Micro credit Product)Focus group – Cobbler, Carpenters, Blacksmiths, Vegetable vendors, cloth vendors, Saloon, Beauty Parlour, PCO, Mobile & repairing shops, Tailor, Kirana shop, Rickshaw puller, Milkman, Newspaper vendors etc. • Loan Repayment-Weekly repayment allowed • Mode of disbursement- Cash disbursement • Loan amount – Up to maximum Rs. 25,000/- • No bill/receipt is required. • Concession of 0.5% to women borrowers. • No insistence on collateral security

  7. Kishan Credit Card-ORIENTAL GREEN CARD ELIGIBLE ACTIVITIES • CROP PRODUCTION NEED • WORKING CAPITAL FOR ALLIED ACTIVITIES • REPAIRS OF MACHINERY. • SMALL CONSUMPTION NEEDS

  8. GENERAL CREDIT CARD Objective: To provide hassle free credit based on the assessment of cash flow without insistence on security, purpose or end use of the credit Loan Amount: • Depends on cash flow of entire household • Maximum limit not to exceed Rs 25,000/- Repayment • Aggregate credits into the account during 12 months period should at least be equal to the amount of interest accrued in the account.

  9. Recurring Deposit Scheme (Oriental GrameenJamaYojana) • Deposit amount-Minimum Rs.5/-and multiples of Rs.5/- • Period of deposit- Minimum 12 months to 10 years • Loan Facility – Maximum 75% of the accrued amount of deposit. • Nomination facility available. • Penalty for delay in installment & Premature Closure – Nil • Interest – Quarterly compounding

  10. Services provided by CSPs/ BCs

  11. Role of Branch • Survey of allotted villages. • Display Map of the villages allotted along with distance from the branch. • Regular visit of allotted villages. • Organization of awareness camp on FIP. • Introduction of Business Correspondent • Publicity on banking services to be offered • Demonstration on use of Bio-metric card for extending banking services. • Sanction/ disbursement of small loans. • Allowing overdraft facility

  12. Role of Branch (cont..) • Ensure display of board at BC’s working place. • Ensure opening of No-frill Acs to each and every eligible households. • Ensure KYC compliance. • Extend full support & co-operation to BC. • Motivate villagers for small savings and recovery of loan. • Issue Pass Books to FIP customers. • Organization of credit camps to issue KCCs/ GCCs to all eligible farmers/ entrepreneurs.

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