ACKNOWLEDGMENT

It gives me immense pleasure and a sense of honor to express my

feeling of gratitude to all those who have helped me in the successful
completion of the present project.

First and foremost I express my deep sense of thankfulness to

Mr. Vipin Parekh, Asstt. General Manager, Bank of Baroda, Udaipur.
I am also thankful to Mr. M. S. Verma, Dy. Regional Manager in
BOB for his valuable co-operation and guidance in undertaking this
work.
My warm acknowledgment is also to all staff members of
regional office, BOB, Udaipur, who took keen interest in extending
necessary co-operation at various stages during the study.
I am gratified to Dean Dr. Siddharth Shastri, & Dr. Harsh
Purohit, faculty, WISDOM, Banasthali, for their earnest coordination
owing to which, I had the leg-up of undertaking the internship at the
prominent organization, Bank Of Baroda.
I express my humble thanks to Mr. Jayant Dwivedi, Lead District
Manager, Dungarpur and his team, Branch Managers of BOB, BRGB,
Dungarpur district, Mr. D. L. Vyas, head, PEDO, Dungarpur for their
support.
I take this opportunity to express my deep gratitude to my family
members to support during project work.
Last but not least, I also thank all those people whom I met in the
organization during my internship and helped directly or indirectly in
completion of the project in the most efficient and effective manner.
 PREFACE

“Success comes with knowledge & knowledge

comes with training.”

To excel in any field practical training is an integral part to imply

theoretical studies to a practical approach it makes the individual to the
actual practical conditions which could have been impossible to be
tough in a classroom. A trainee learnt dealing with the worker and
management- working environment along with operational skills.

This research provided me an opportunity to demonstrate

application of my knowledge, skill and competencies required during
the technical session.

Research also helped me to devote my analytical skill to

analyze the problem to suggest alternative solution, to evaluate them
and to provide feasible recommendation on the provided data. The
research is on the topic of “Impact of financial inclusion on
customer covered and ways to make it more effective” Although
I have tried my level best to prepare this report, visiting Bank of
Baroda was one of the finest experiences I have ever gained.

Chetna Ameta

MBA SEM-II

2
 EXECUTIVE SUMMARY

Financial Inclusion which flashed on the horizon of banking industry in

the wake of inclusive growth policies, has after crossing the crucial tides of
time, BOB has emerged as a pioneer in Rajasthan concerning inclusive
growth. BOB is a frontier in searching for an alternate credit delivery
mechanism through Self Help Groups.
 Financial Inclusion:
• For individuals, it would help in accessing basic banking services at
low cost and with higher safety;
• For economy, it would help in availability of larger resources by
encouraging savings and generating means of livelihood for the poor
people by enabling them access to credit from formal sources.
There are 3 steps for financial inclusion.
1. Opening saving account of minimum 1 member in each household
to connect people with formal credit system.
2. Make them available various financial instruments at affordable cost
and convenient manner.
3. Provide training and financial education so that they can not trap in
clutch of local money lender.
Financial inclusion is not merely opening No Frill account or
sending NREGA payments to farmers but also grant of small overdraft
facility or KCC besides remittance product, sale of insurance products
both health and life insurance product to them ultimately leading to a
situation where he can claim entrepreneur credit on his own credibility.

3
 Significance of the Topic:

I have chosen this topic because financial inclusion is an

emerging concept over the past few years. RBI has asked Banks for a
three-year plan on the extent of financial inclusion. It is aimed at
pursuing rural development in addition to increase portfolio of bank.
The topic was tedious since it’s quite difficult to communicate and to
convince rural people. As India is a land of farmers, with a population
of about 70% people residing in villages, so India’s economic
development cannot be possible by avoiding general masses. It has
always been my passion to identify the problems of the people in rural
areas and rectify them.
In this project, I studied the effect on banking services before and
after financial inclusion. For the same, I met branch managers of
Dungarpur district and nevertheless rural customer. The interaction was
a very enriching experience. There is 20 to 90% increase in saving
accounts as well as outstanding credits are increased highest in crop
loan through BKCC. Kisan clubs, Baroda gramin paramersh Kendra
(BGPK), Baroda swarojgar vikas santhan (BSVS) self help group
(SHG) etc have good contribution to achieve 100% financial inclusion
in Dungarpur District. Till 2009-10 the income generates about
negative 7000 to 18000 Rs. per annum in the Dungarpur project of
BOB. There was some non performing assets (NPA) due to drought and
global meltdown. Curtsey to the project, I get to know both the impact
of financial inclusion and the problems faced by the customer covered
and bank.
In another part of the report I have given my humble
recommendations to Bank of Baroda which I hope will be useful to the
company in improving its business processes.

4
 These recommendations include proper training and financial
literacy in the rural people. Suitable financial product availability, using
Unique identification number (UIN), new technology like smart card,
biometric etc, mobile and internet banking, satellite branch, Attempts of
giving better future opportunity to more persons connected with banks.
Overall this project gave me an overview of financial inclusion sector
allowing me to apply my various skills in presentations, People
Management and Research.
While financial inclusion, in the narrow sense, may be achieved
to some extent by offering any financial services, the objective of
comprehensive Financial Inclusion would be to provide a holistic set of
financial services.

5
 INDEX

Chapter Contents Page No.

1. Introduction to Organization………………………………7

• Brief introduction of Bank of Baroda…………………

• Heritage of bank……………………………………..
• Products and Services………………………………..
• Organizational chart …………………………………
• International presence…………………………………
• Today’s scenario……………………………..

2. Introduction to financial Inclusion ………….……………….. 13

• Genesis of the problem…………………………………….

• Financial exclusion
• Financial inclusion
• Bank contribution towards financial inclusion
• Initiative taken b BOB

3. Research methodology……………… 39

• Scope of the study

• Flourishing saving accounts
• Advancement in advances
• Income increase in different sector
• Field visit- SHGs, farmers club,
• Conclusion

4. Limitations of bank regarding

Financial inclusion ………………. 62

5. Recommendation……………………. 65

Annexure……………………………. 72

Bibliography………………………… 74
6
 CHAPTER - 1
INTRODUCTION TO THE ORGANIZATION

BANK OF BARODA is the third largest bank in India following

State bank of India and Punjab National bank. Presently M.D. Mallya is
the chairman and the managing director of BOB. A network of over
3132 Indian and 80 foreign branches and offices and about 11,000 +
ATMs. It offers a wide range of banking products and financial services
to the corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries and affiliates in the
area of investment banking, credit cards and assets management. The
bank belong with 13 other major commercial banks of India, was
nationalized on 19th July 1969 by govt. of India.

HERITAGE OF BOB
Bank of Baroda was started on 20th July 1908. Under the
companies’ act of 1887, the initial capital invested was Rs 10 lacs. The
maharaja was none other than Sayajirao Gaekwad III in the princely
state of Guajarati, who with his vision and sight, planned the beginning
of a reputed journey which over the years, came to be known as the
BANK OF BARODA. BOB’s reputation can be seen through the fact

7
 that it has public share holding is as high as 46.19% with a total equity
capital of 365.53 crores.

PRODUCTS AND SERVICES

Given below is the list of services offered by Bank of Baroda:
• Retail Banking
• Rural/Agri Banking
• Wholesale Banking
• SME Banking
• Wealth Management
• Demat
• Product Enquiry
• Internet Banking
• NRI Remittances
• Baroda e-Trading
• Interest Rates
• Deposit Products
• Loan Products
• ATM / Debit Cards
Bank of Baroda takes special care to look after the
requirements of its shareholders. Given below are the various benefits
provided to the shareholders of the bank:-
• Change of address or names of Shareholders
• Transmission of shares
• Transposition
8
 • De-materializing Shares
• Investors Services Department
• Registrars & Share Transfer Agent
• Bonds related to Transfer
• Lodgment of Shares
• Duplicate Share Certificate
• Duplicate Dividend Warrants
• Revalidation
• Means of communication
• Investor Grievance Committee
• Electronic Clearing Services or ECS
• Stock Market Data
Personal Services
• Deposits
• Gen-Next
• Loans
• Credit Cards & Debit Cards
• Services
• Lockers
Corporate Services
• Wholesale Banking
• Deposits
• Loans

9
 • Advances
• Services

International Services
•NRI Services
•FGN Currency Credits (Foreign Currency Credits)
•ECB (External Communication Borrowings)
•FCNR (B) Loans
•Offshore Banking
•Finance in Export and Import
•Correspondent Banking Facility
• International Treasury
Treasury service of Bank of Baroda includes Domestic operations and
Forex operations.
Domestic Services

• Deposits

• Priority Sector Advances

• Services

• Lockers
Priority Sector Advances
• Small Scale Industries
• Small Business

10
 • Retail Loans
• Schemes sponsored by the GOI (Government of India)
• Baroda General Credit Card Scheme (BGCC)
• Agriculture related Loan

ORGANIZATION CHART:

11
INTERNATIONAL PRESENCE
Ever since its inception, the bank has been growing and
expanding its branches successfully. At the turn of a century, the bank
has its presence in 25 countries across the world. Bank of Baroda has
progressively taken a step towards commitment and values by
providing uncompromising standards of service to its customers,
stakeholders, employees and the like.
In its international expansion BOB followed the Indian Diaspora
and specially that of Guajarati’s. It has a significant international
presence with a network of 72 offices in 25 countries, 6 subsidiaries
and 4 representative offices. Among BOB’s 42 overseas branches are
once in the world’s major financial centers i.e. New York, London,
Dubai, Hong Kong, Brussels and Singapore, as well as a number in
other countries. The bank is engaged in retail banking via 17 branches
of subsidiaries Botswana, Guyana, Kenya, Tanzania and Uganda. BOB
has a joint venture bank in Zambia with 9 branches. BOB maintains
representative offices in Malaysia, China, and Thailand. It plans to
upgrade offices in china and Malaysia shortly to a branch and joint
venture respectively.
TODAY’S SCENARIO

12
• Total Business (Deposit + Advances) Rs. 4, 16,080 crore reflecting a
growth of 24.0%.
• Net Profits Rs. 3,058 crore
• Total Assets Rs. 278,316 crore
CHAPTER -2
INTRODUCTION OF FINANCIAL INCLUSION
On 29 December 2003, Former UN Secretary-General Kofi
Annan said: “The stark reality is that most poor people in the world
still lack access to sustainable financial services, whether it is savings,
credit or insurance. The great challenge before us is to address the
constraints that exclude people from full participation in the financial
sector. Together, we can and must build inclusive financial sectors that
help people improve their lives.”
Notwithstanding the rapid increase in overall GDP and per capita
income in recent years, a significant proportion of the population in both
rural and urban areas still experiences difficulties in accessing the formal
financial system. There is currently a perception that there are a large
number of people, potential entrepreneurs, small enterprises and others,
who may not have adequate access to the financial sector, which could
lead to their marginalization and denial of opportunity to grow and
prosper.
According to a report in April 2009, about 46% of the 403 million
mobile users didn’t have bank accounts. “People can do without bank
accounts but not mobile phones. My driver Raju like many other people
too doesn’t have a bank account but he carries a cell phone. He has not
been able to get an account as he doesn’t have a proof of address and
13
 can’t fulfill the KYC (know your customer) norms, essential for
opening a bank account.

FINANCIAL EXCLUSION
This is termed “financial exclusion”. Financial exclusion
signifies the lack of access by certain segments of the society to
appropriate, low-cost, fair and safe financial products and services from
mainstream providers.
Reserve Bank of India data shows that as many as 139 districts
suffer from massive financial exclusion, with the adult population per
branch in these districts being above 20,000 and only 3% with borrowings
from banks.

 Causes of Financial Exclusion

A. Demand-side Barriers: Following issues have a
significant bearing on the extent of financial
exclusion/ inclusion:
1. Cultural factors - Most women are disadvantaged by credit requirements
such as collator since the money is on their father/husbands’ name forcing
them to seek male guarantees to borrow.
2. Mistrust of financial institutions - The feeling that there is no point in
applying for financial products because he/ she expects to be refused as
banks are not interested to look into their cause has led to self-exclusion
for many of the low income groups.

14
3. Level of income – The main reason for financial exclusion is the lack of
a regular or substantial income. Poor people have a tendency that banks
are for rich and hence excluding themselves from financial services.

4. Financial literacy and skills capacity – High information barriers, low

awareness and limited literacy, particularly financial literacy, i.e., basic
mathematics, business finance skills as well as lack of understanding often
constrain demand for financial services.
5. Legal identity : Lack of legal identity like voter id , driving license ,
birth certificates ,employment identity card etc
6. Lack of awareness: Finally, people who lack basic education do not
know the importance of the financial products like Insurance, Finance,
Bank Accounts, cheque facility, etc.

B. Supply-side Barriers: The following issues on

the supply side are major obstacles in
providing an adequate supply of financial
services to the currently unbanked:
1. Location constraints – Absence of physical infrastructure in interior-
most parts of the country leads to difficulties in accessing financial
institutions (like banks, etc) resulting in a substantial proportion of
households in rural and remote areas being kept outside the ambit of the
formal financial system.
2. Complicated procedures: Due to lack of financial literacy and basic
education, it is very difficult for those people who lack both to read

15
 terms and conditions and account filling forms. Getting money for their
financial requirements from a local money lender is easier than getting
a loan from the bank.
3. Terms and conditions : While getting loans or at the time of opening
accounts banks places many conditions , so the uneducated and poor
people find it very difficult to access financial services .
4. Approaches and products - Generally, financial services tend to be
concentrated in urban areas, allowing rural clients little access to services
and information for making well grounded decisions.
5. Financial viability of MFIs - MFI practitioners encounter difficulties
in having a “double bottom line”: at the same time aiming to be
profitable and stimulating local economic development.
6. The proximity of the financial service-It is another fact. The loss is
not only the transportation cost but also the loss of daily wages for a
low income individual.
7. Collateral requirement- Most of the banks need collateral for their
loans. It is very difficult for a low income individual to find collateral
for a bank loan.
8. Focus on meeting financial targets-Moreover, banks give more
importance to meeting their financial targets and hence focuses on
larger accounts.
Financially Excluded People The financially excluded sections
largely comprise:
• Marginal farmers
• Landless laborers

16
 • Oral lessees
• Self employed and unorganized sector enterprises
• Urban slum dwellers
• Migrants, senior citizens & women
• Ethnic minorities and socially excluded groups.

 Consequences of Financial Exclusion

• Main consequences-
1. Losing opportunities to grow: In the absence of finance, people
who are not connected with formal financial system lack
opportunities to grow.
2. Country's growth will retard: Due to vast unutilized resources that
is in the form of money in the hands of people who lack financial
inclusive services.
3. Higher interest rate: Individuals/ families could get sucked into a cycle
of poverty and exclusion and turn to high cost credit from moneylender
s, resulting in greater financial strain and unmanageable debt. At the
wider level of the society and the nation, financial exclusion leads to
social exclusion, poverty as well as all the other associated economic
and social problems.

17
• Other Consequences :
1. Business loss to banks : Banks will loss business if this condition
persists for ever due to lack of opening of bank account. Banks often
avoid extending their services to lower income groups because of initial
cost of expanding the coverage which may sometimes exceed the revenue
generated from such operations.
2. All transactions cannot be made in cash: Some transactions can be
made in cash. In this technological world everybody wants to have
electronic cash system like debit and credit cards and also EFT.
3. Loss of opportunities to thrift and borrow: Financially excluded
people, may lose chances to save their some part of livelihood earnings
and also to borrow loans.
4. Loss due to theft: Banks provide various schemes of safety locker
facility. It mitigates the risk due to thefts.
5. Other allied financial services: People who do not have bank accounts
may not go to bank as for as possible. So they lack basic financial

18
 auxiliary services like DD, Insurance cover and other emergency need
loans etc.

FINANCIAL INCLUSION
Financial inclusion is a result of findings about financial exclusion and
its direct correlation to poverty. Financial inclusion is now a common
objective for many central banks among the developing nations. By
financial inclusion, we mean delivery of banking services and credit at
affordable cost to the vast sections of disadvantaged and low income
groups.

• According to UNITED NATIONS, “A financial sector that provides

access to credit for all "bankable” people and firms and to savings and
payments services for everyone. Inclusive finance does not require that
everyone who is eligible use each of the services, but they should be
able to choose use them if desired.”
• REPORT OF THE COMMITTEE ON FINANCIAL INCLUSION
IN INDIA (Chairperson: C. Rangarajan ) (2008) “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.”
According to the United Nations the main goals of Inclusive Finance are
as follows:
1. Access at a reasonable cost of all households and enterprises to the
range of financial services

19
2. Sound institutions, guided by appropriate internal management
systems, industry performance standards, and performance monitoring
by the market, as well as by sound prudential regulation where required
3. Financial and institutional sustainability as a means of providing access
to financial services over time
4. Multiple providers of financial services, wherever feasible, so as to
bring cost-effective and a wide variety of alternatives to customers

 Major Three Aspects Of Financial Inclusion' Make people to

• Access financial markets

• Access credit markets

• Learn financial matters (financial education )

 National scenario of Financial Inclusion:

India has currently the second-highest number of financially
excluded households in the world. Approximately, 40% of India’s
population has bank accounts, and only about 10% have any kind of life
insurance cover, while a meager 0.6% has non-life insurance cover.
The Reserve Bank of India setup a commission (Khan
Commission) in 2004 to look into Financial Inclusion and
commission’s reviews were incorporated into the Mid-term review of
the policy (2005–06).

20
 In India, Financial Inclusion first featured in 2005, when it was
introduced from a pilot project in UT of Pondicherry, by K. C.
Chakraborthy, the chairman of Indian Bank. Mangalam Village
became the first village in India where all households were provided
banking facilities.
In India Financial inclusion will be good business ground in
which the majority of her people will decide the winners and losers.

 Services Under Financial Inclusion: Financial Inclusion Includes

Accessing Of Financial Products And Services. In India the basic
concept of financial inclusion is having a saving or current account with
any bank. In reality it includes loans, insurance services and much
more.
• Savings facility
• Credit and debit cards access
• Electronic fund transfer
• All kinds of commercial loans
• Overdraft facility
• Cheque facility
• Payment and remittance services
• Low cost financial services
• Insurance (Medical insurance)

21
• Financial advice
• Pension for old age and investment schemes
• Access to financial markets
• Micro credit during emergency
• Entrepreneurial credit

 Benefits Of Inclusive Financial Growth:

1. Getting out from clunch of local money lenders- The local money
lender just abolish the poor people by imposing high interest rates while
the same can be borrowed from the bank at a very low rates.
2. Growth with equity: In the path of super power we the Indians will
need to achieve the growth of our country with equality. It is provided
by inclusive finance.
3. Get rid of poverty: To remove poverty from the Indian context all
everybody will be given access to formal financial service. Because if
they borrow loans for business or education or any other purpose they
get the loan will pave way for their development.
4. Financial Transactions Made Easy: Inclusive finance will provide
banking related financial transactions in an easy and speedy way .

22
5. Safe savings along with financial services : People will have safe
savings along with other allied services like insurance cover ,
entrepreneurial loans , payment and settlement facility etc,
6. Inflating National Income: Boosting up business opportunities will
definitely increase GDP and which will be reflected in our national
income growth.
7. Becoming Global Player: Financial access will attract global market
players to our country that will result in increasing employment and
business opportunities.
8. Reducing corruption: These days salaries are directly credited in the
respective person’s bank account like for the payment in NREGA
scheme is being deposited in their no frill accounts. So, a link in the
corruption chain is uprooted.
Expectations of poor people from financial system Taking into
account their
• Seasonal Inflow Of Income from agricultural operations,
• Migration from one place to another,
• Seasonal and irregular work availability and income; the existing
financial system needs to be designed to suit their requirements.
• Security and safety of deposits
• Low transaction cost
• Convenient operating time
• Minimum paper work
• Frequent deposits
• Quick and easy access
• Product suitable to income and consumption

23
 Ways to make inclusive finance--
1. No frill account- The minimum barring deposits has been
set to zero or minimum Rs. 50 without identity and address
proof and hence attracting poor and low income people.
2. Self Help Groups- SHGs are usually groups of women
who get together and pool money from their savings and
lend money among them. The SHG is given loans against
the group members’ guarantee. Peer pressure within the
group helps in improving recoveries. Approx. 125-140
crores of credit is going annually through SHGs in state.

3. Affordable Product-The main reason is that the products

designed by the banks are not satisfying the low income
families. The provision of uncomplicated, small, affordable
products will help to bring the low income families into the
formal financial sector.
4. Business facilitators & business correspondents-Banks
have limitations to reach directly to the low income
consumers. In January 2006, the Reserve Bank permitted
commercial banks to make use of the services of non-
governmental organizations (NGOs/SHGs), micro-finance
institutions, civil society organizations as intermediaries,
serving as an excellent channel which banks can use to
distribute their product information. Educating the

24
 consumers about the financial benefits and products of
banks which are beneficial to low income groups will be a
great step to tap their potential.
5. Regional Rural Banks-. One of the reasons for opening
new branches of Regional Rural Banks in 1975 was to
make sure that the banking service is accessible to the poor
Nationalization of the major private sector banks in 1969
was a big step.
6. Bank Coverage expansion- As the competition increased
in banking sector, they encouraged expansion of bank
branches especially in rural areas.
7. Priority Sector Lending- The RBI guidelines to banks
shows that 40% of their net bank credit should be lent to the
priority sector. This mainly consists of agriculture, small
scale industries, retail trade etc. More than 80% of our
population depends directly or indirectly on agriculture. So
18% of net bank credit should go to agriculture lending.
8. Simplified KYC Norms- Recent relaxation in KYC(Know
your Customer) norms are another milestone, built by RBI
for people intending to open accounts with annual deposits
of less than Rs. 50, 000
9. Self Controlling of Bank- Financial inclusion is a great
step to alleviate poverty in India. But to achieve this, the
government should provide a less perspective environment
in which banks are free to pursue the innovations necessary
to reach low income consumers and still make a profit.
25
10. Knowledge about Customer- Financial service
providers should learn more about the consumers and new
business models to reach them.
11. Easy Credit Access- General Credit Cards (GCC)
were issued to the poor and the disadvantaged with a view
to help them. some of our banks have now come forward
with general purpose credit cards and artisan credit cards
which offer collateral-free small loans.
12. Pursuing Campaigns- RBI asked the commercial
banks in different regions to start a 100% Financial
Inclusion campaign on a pilot basis. Reserve Bank of
India’s vision for 2020 is to open nearly 600 million new
customers' accounts and service them through a variety of
channels by leveraging on IT.

26
 Bank contribution towards financial inclusion:
Radha Devi, of Malmatha village in Dungarpur district is a
shopkeeper. She told her story in survey conducted. “My life changed
after I became a member of the Mahila Bachat and Sakh Samuha, I was
able to take a loan of 30,000 rupees from the bank out of which I spent
10,000 rupees to build my shop and the rest in buying the goods. I have
already repaid the loan from the profits earned.” Radha Devi has since
then taken a fresh loan of 15,000 rupees which was used in growing
fodder. This, she says, gives her an additional income of up to 3,000
rupees per month.

Radha Devi’s story is one among many such success stories

fostered by the Bank of Baroda’s rural development initiatives. These
initiatives are a part of the Bank’s mandate of financial inclusion for
extending banking services to rural population through its ‘whole
village approach’. Bank of Baroda, the lead bank in Rajasthan, under
the able leadership of its Earlier CMD Dr. Anil Khandelwal, took up a
special project called ‘Dungarpur Project’ to pilot the bank’s
involvement in integrated development of poor area.

 Reason for selecting Dungarpur for 100% financial inclusion

1. Dungarpur is backward district of Rajasthan in terms of social and
27

economic development hence there is great possibility of

 CHAPTER - 3
RESEARCH METHODOLOGY

 Scope of the study

The whole study was basically on the collection of data from primary
sources. For collection of primary data a survey was conducted in
various villages of the branches surveyed in the Dungarpur district.
Methodology has been extensively discussed under the heading given
below on the following pages:

• Research Design

• Collection of Data

• Sampling scheme.
1. Research Design:
Research designs the overall description of all steps through which the
project has protected from the setting of objective to the writing of
project report.
2. Source of Data:
• Primary Data: The primary data has been collected by
village survey method. This is the most economical,

28
 efficient and effective way of collecting the data. It yields
a wide range of information on various characters like
attitude, opinion, behavior, current scenario etc. Primary
data was collected through questionnaire.

• Secondary Data: The secondary data has been collected by websites,

broachers, journals, Magazines, financial statement of branches of BOB
(Dungarpur) etc.
• Preparing a suitable data collection method: In this project it was
found that questionnaire as per Annexure was the best method of
obtaining the relevant data. A survey was found to be most appropriate
to serve the objective already prepared. The research carried out
through the survey was conclusive and descriptive in nature.

3. Sampling Scheme:
In this project random sampling was the appropriate method. A sampling
design is a definite plan determined before any data actually collected
for obtaining representative result.
• Type of Universe: The first step in developing any sampling design is
to clearly define set of objects, population size, technically called the
universe.
• Sampling Size: Sample size is the total number of respondent included
in the sample assuming them to be true representative of the population.
I tried to contact only those persons who could give unbiased and
representative information.

29
 As BOB has adapted Dungarpur for the financial inclusion thing
under the whole village approach. Dungarpur is one of the tribal areas
in Rajasthan. The Dungarpur branch is divided into 5 blocks.
I have covered 9 main branches from the bunch of 29 branches.
From each branch, as per area I have covered 2-4 gram panchayats.
And from each panchayats put my concentration on 1-3 villages
covering about 25% of each branch. The sample covered from the
population sums up to 350 people comprising both rural and urban
areas and a suitable comparison has been drawn.

SAMPLE SURVEYED

30
I have chosen samples through random sampling method. I selected
samples proportionate to the population indulged in dairy, crop loan,
rural artisan etc.

I have surveyed 350 sample from Dungarpur district covered 5

blocks. Most of the people indulge in crop cultivation and taken loan
through Baroda kisan credit card (BKCC). Further people began with their
traditional business like bamboo business , shoemaking, carpentering etc.
they get loan through various govt. sponsored scheme like Swarnjayanti
gramin swarojgar yojna (SGSY), SJSRY etc. self help group (SHG) has a
great contribution to link people with banking services.

31
The pie chart above shows samples have been taken in the proportion to
customer connected to the branch surveyed.

 Objectives:

1. To identify the extent and nature of financial inclusion in

Dungarpur.
2. To understand the drivers of financial exclusion/
inclusion.
3. To determine the level of awareness of people in various
financial products and interest in undergoing courses in
financial inclusion.
4. To assess further thrust needed to achieve 100 percent
financial inclusion so as to enable appropriate policy
modifications.

32
 5. Finally, to hear from the very people for whom various
financial inclusion initiatives have been launched, what they
think and what needs to be done by government agencies to
make them financially included.
6. To determine the increase in the portfolio of bank.

 Research Methodology:

• Nature of Data : Primary Data

• Area of Research : Dungarpur

• Sample Size : 350 village people

• Sampling Procedure : Random Sampling

• Data collection Method : Questionnaire

• Research Instrument : Questionnaire

• Research Design : Exploratory

 HYPOTHESIS:
The financial inclusion has main emphasis on the
development of bank accounts and per capita income. And the data
shows that there has been a substantial amount of growth in both the
fields. Hence the financial inclusion hypothesis is positively executed.

 Relationship between Financial Inclusion and Development Indicators

33
• Savings and credit accounts – Indicator of financial inclusion from
the bank side
• Per capita income – Indicator of financial inclusion from the people
surveyed by me.

 Flourishing of savings account:

We looked at various aspects of financial inclusion. One was the
savings side where we tried to assess the number of households having/
not having a bank account before and after financial inclusion. , the
reasons behind opening an account and the awareness among people on
the recently launched initiative of no-frills accounts.

34
 DEPOSITES INCREMENT AFTER FINANCIAL INCLUSION

After having a look at this chart, one can easily conclude that financial
inclusion has brought a revolutionary change in the field of deposit
account amounts. The data shows a hike of about 20% to 90%. The
maximum development is shown in Dungarpur branch. The main
reason could be the city is surrounded by many villages resulting in the
awareness of people. Another reason contributing is the more number
of SHGs.

35
 When in 2007, Dungarpur project started by bank of Baroda,
100% households were covered by BOB through no frill account but
when CBS was introduced in core banking, most of the accounts were
deleted due to zero balance in their accounts. But under govt. scheme
NREGA, most of the accounts were newly set up. Another reason for
opening account might be for requesting loan, receiving remittances
and for saving money because there is increase in income due to efforts
of BOB and other banks in Dungarpur.

 Advancement in advances:
On the borrowing side, I identified households which have ever availed of
loans from BOB or rural bank Baroda Rural Grameen Bank (BRGB).

1. On the basis of year wise and sector wise:

Type of Loan- The scenario in rural household, the majority of households
surveyed borrowed for dairy, crop, vegetable production and rural artisan.

LOAN IN DIFFERENT SECTORS IN DUNGARPUR

36
 It can be seen that loan taken in various sectors has been
taken and the chart has the same verdict. And a drastic
improvement is viewed in the vegetable production sector. After
inclusion in scene i.e. from 2007, about 5 times improvement
which is huge in terms of finance. This all has been only due to
the works of BOB which were well focused and a great emphasis
on financial inclusion by the bank.
The bank chose only Dungarpur because revolution can be made
there with ease. The planning was well executed hence the result is in
front. BOB has excelled in one more fields. And for vegetable
production the farmers previously used to borrow money from money
lenders where the rates were too high for rural people to repay and
eventually leading to their suicides, permanent indebtness and their
migration. So BOB first aimed at freeing the farmers from the clunch of
money lenders.BOB provided loan at lower interest rates and hence
giving the farmers to grow more crops from the same amount of money
they previously used to. Also BOB helped the farmers by initiating
Baroda Grameen Paramarsh Kendra that trained the farmers for
37
 vegetable production and unemployed rural youth to pursue gainful
vocation.

TOTAL LOAN DISBURSEMENT BY BOB & BRGB IN DUNGARPUR

On a cumulative scale of BOB and BRGB, a constant growth in

lending loans is seen after 2006 mainly due to financial inclusion. And
after that it has never seen back. It is regularly increasing. The success lies
behind the curtains of micro finance.

38
 outstanding data of Dungarpur
district

8000

Amount in lacs
2006-07
6000
2007-08
4000
2008-09
2000
2009-10
0
crop term SME others
loan loan
sectors

By this chart we can easily interpret there is positively growth in

credit with reference to different sector like crop loan, term loan, small
& medium enterprises (SME) and others like marriage, education etc.

2. Branch wise comparison

CROP LOAN

39
 The crop loan in various branches surveyed is shown in the above
chart. Simalwara stands tall in this field. Next in the race is Dungarpur
Followed by Bichhiwara and Aspur. In Simalwara, people are agriculture
oriented and also the land is fertile giving them a chance to take more loans
and make higher profits.

TERM LOAN

Term loan comprises of lending loans to the various forms of

farming such as farm mechanism, dairy, land development, irrigation
and other agriculture related activities.
Gamri Ahara branch leads in disbursement of term loan.

GROSS LOAN

40
 Above drawing shows the gross loan (crop + term loan) in various
branches. Again Simalwara is at the top in lending loans followed by
Dungarpur which shows a good improvement in 2010. Gamri Ahara and
Bichhiwara are also not far too behind in disbursing loans.

ADVANCES INCRIMENT AFTER FINANCIAL INCLUSION

41
The chart above shows the loan disbursement hike after the financial
inclusion of every branch. Sagwara shows a whopping increment in
disbursing loan after the inclusion came in frame.

 Per capita income:

On my part I met people from the villages and asked them to fill some
questionnaires, discussed about their deposits, loans, the strength of
their SHG linkage, their purpose for linking with the bank, are they
satisfied, confirmed their proof attachment etc. I have also attached
project sites photos.

The main are summarized as follows:

42
1. Valid Purpose – Was their purpose of borrowing money went right or
not.
• Mostly the purpose of borrowing loans are-
a. crop
b. Dairy
c. DPS, water pumps, irrigation pumps, water motor etc
d. Farm mechanism like purchase of tractors, threshers etc.
e. Buying cattle
f. Rural artesian -Opening or expansion of shops
g. Home loan
h. Others- marriage, education, social activities, land development,
vehicle purchase etc.
2. They spend their money in the fulfillment of prescribed purpose or
somewhere else.
3. Did their purpose fulfill or not.
4. Impact of borrowing money on their life.

43
 INCOME INCREASE AFTER FINANCIAL INCLUSION

By efforts in Dungarpur project income increased by -7000 to

18000 Rs per annum in different sector.
The reason behind negative income generation are-
1. Drought condition- There is drought condition in Dungarpur District so
farmers didn’t pay their loans due to loss in their occupation. Bank
extend 1 year BKCC loan repayment to give relaxation to the creditor
suffered.
2. International recession – due to this market suffered thus results in loss
to the general mass.
3. The borrowers didn’t invest their whole lending money in the purpose
proposed so income of most of the farmers decreases. They have
assurance ,govt. might give them relaxation in repayment so they waste
their money in gambling and drinking so far.
Mean while there is increase in income in different sector. In rural
artisan there is highest income generation because bamboo occupation
44
 has great handicraft value in today’s era. It require low investment and
high returns.

These sectors are:

Dairy:
Credit was provided to SHG for buying animals and fodder who are
engaged directly or indirectly in cattle rearing and dairy activities. Milk
collection centers, marketing facilities were made available to the
community and technical knowledge has been also imparted to enhance
milk production.
Crop:
The rural folks were unable to adapt the correct way of fertilization,
transplantation. 4 BGPK were opened in Dungarpur district to impart the
technical knowledge regarding farming.
Vegetable Production:
Due to the lack of knowledge, tribal have been growing seasonal
vegetables on their small land holding. Through SHG and complete
package of credit and technical support has been provided to members for
vegetable cultivation and knowledge was imparted about fertility of land
and suitable vegetable.
Rural Artisan:
Owing to poverty and unemployment, the rural people were
forced to quit their traditional occupation of bamboo products. To ensure
bank availability of raw material, these families are provided loan through

45
SHGs. This have reduced expenses on transportation and hence increased
the profit.

 Field Visits:
Apart from conducting financial inclusion surveys in Dungarpur, I also
embarked on my journey to evaluate the myriad initiatives that have been
launched to promote financial inclusion, by undertaking field visits and
assessing the ground reality. I went on to meet members of SHGs and
farmers’ clubs in Dungarpur district, visited PEDO (People Education and
development organization), a local NGO in Mada, Dungarpur.
In all these visits and sessions, we tried to assess whether the
financial inclusion initiatives that have been undertaken were working in
accordance with the issued guidelines or not, and if not, what were the
reasons holding it back. I believe that only with effective implementation of
such schemes, can their desired goals be achieved, and their benefits
realized by the targeted groups.

1. Meeting members of SHGs and Farmer Clubs:

My interaction with members of SHGs and Farmer Clubs provided a new
insight in the working of such groups, their activities, their problems and
their feedback on the scheme.

46
 a. Interaction with SHGs: The SHGs were involved in
activities like dairy, spices and vegetable cultivation etc –
agriculture being the key activity. SHG members were
imparted a one month duration training by BGPK,
teaching them the basics and intricacies.
Talks with some of the SHGs like Jai Ambe SHG, Kanta SHG,
Mani Samooh etc. from Relda, Dungarpur revealed that they used to
save a amount of Rs. 50 to 150 per month and deposited that money in
saving account and whenever needed, they opted for loan. Bank used
to charge 9% interest rate p.a. but SHGs’ charges 18% p.a. from the
members. The extra amount is used by the SHG in its working.

b. Interaction with Farmer Clubs: There were relatively

few Farmer Clubs in comparison to the number of SHGs. The
key activity among the Farmer Clubs, though, was
agriculture.
Post-farmer club formation, they had started recognizing the advantages
of team work. Instead of all the members visiting the market for seed
purchasing (as was in earlier occasions), now only one of the group member
visits the market. This has distributed and brought down their travelling
expenses.
Farmer Club members were encountering difficulties in availing
the Kisan credit Card (KCC) facility. This was so, as the farmers were
not having the title deeds of their land which the banks sought, in order
to give the KCC facility. Also, the Land Possession Certificates (LPCs)
47
 issued by the district administration were not recognized as an authentic
document by the banks and this had led to many groups not being able
to access the KCC facility.

• The Self Help Group (SHG) savings account has shown a tremendous
increase over a past few years. This is mainly attributed to the fact that
BOB has shown a great emphasis on SHGs opening and has its roots in
the no frill accounts.

• SHG (bank linkage) show advances taken by SHG for the fulfillment of
need of the members joined SHG. There is an increase in advances also
after inclusive finance because SHG head is making aware about credit
plans and govt. sponsored schemes of BOB.

48
• Kisan credit card (KCC), BOB’s new invention, has been provided at a
large scale to the farmers giving them a new dimension of money
borrowing. KCC helps in disbursing the loan very easily.

• BOB has motivated the farmers to start a club consisting of farmers

who need guidance at various levels. The famers well responded to this
and eventually they were benefitted.

• Also many more farmers were attracted to this club and hence increase
in no. of farmers in the club. Development by discussion is the main
motive of this club.

YEAR WISE STATUS OF SHG,KCC & KISAN CLUB

BOB and BRGB together hold a great position in the financial frame. The
above chart shows the overall loans given to KCC, SHG, and etc.

49
This showed a high in year 2008-09. In the year 2009-10 SHG saving,
bank linkages, KCC and kisan club decrease because of -
1. Drought condition
2. International Recession
3. Area is limited so most of the people covered in initial years i. e.
in 2008-09 and remaining population connected in 2009-10 which were
less than 2008-09.
5. The borrowers don’t invest their whole lending money in purpose
proposed so income of most of the farmer remains same result in less
profit. So graph decreases in 2009-10.

 Assessment:
Although the SHGs were having some minor confusions regarding
the revolving the credit subsidy and not routing the savings through bank
accounts, overall, they were in an advanced stage of micro-enterprise
development. They even admitted of their living standard being improved,
albeit to a somewhat little extent, after entering in the SHG fold.
Similarly, the Farmer Club members too had imbibed the
philosophy of working with each other in tandem and availing credit
facilities under KCC & Government sponsored schemes.

50
 It was also noticed that linkages under the SGSY scheme were much
lower than normal linkages. This was amplified by the NGO’s view that under
the SGSY scheme, people were more interested in availing the revolving fund
interest subsidy rather than undertaking productive activities with the credit
availed. The SHPI’s preference for normal linkages rather than SGSY linkages
prevented villagers to fully exploit the benefits envisaged under the SGSY
scheme.
For smooth and timely implementation and short out the issue of ground
level, stering committee at state & district level have been constituted with rep.
from bank, CMF & PEDO.

 Conclusion:
Taking into view of the economic and social conditions of the
Dungarpur District, Bank chalked out specific programs of actions, to
improve the conditions of rural community in a given time frame of 3
years ( 2007-10)
1. Financial inclusion has set up new heights in reference to deposits in saving
accounts ranging 20% to 90%.
2. NREGA plays an important role in connecting the
people to the bank.
3. BOB is providing financial assistance to families for
Dairy Development, high value crops, vegetable
cultivation and for promoting rural artisans. Under
51
 the field, Vegetable production, loan disbursement is
constantly flourishing.
4. Outstanding credit is highest in Crop sector and minimum in
SME from the year 2007.
5. Surveying branches, I concluded loans given under the head
crops were maximum in Simalwara and term loans in Gamri
Ahara. Having a look at the gross, Simalwara is at the top
followed by Dungarpur branch, under Dungarpur project of BOB.
6. Total advances increment is highest in Sagwara followed by
Dungarpur branch.
7. Thanks to financial inclusion that per capita income in the fields
under survey has shown an increment of approximate 9000-
18,000 rupees p.a.
8. Establishment of 176 Farmers’ Clubs, for expert advice on
agricultural and financial issues and linkage of 2062 SHGs in the
villages of the district by BOB played a vital role in the overall
social development.
9. On a combined scale, BOB and BRGB together opened as many
as 3410 SHGs and 279 kisan clubs.
10. Training over 2091 rural youth and women through Bank’s
Baroda Swarojgar Vikas Sansthan (BSVS) for employment
generation up to May, 2010. Bank will also sponsor deserving
youth for training on micro finance for 6 months.
11. Four “Baroda Grameen Pramarsh Kendra – BGPK” were opened.
This is a centre with internet facilities where farmers will have

52
 access to information on agriculture, weather conditions, crops,
etc. The Kendra is equipped with an agriculture officer of the
bank who provide consultation to the farmers.

CHAPTER- 4
LIMITATION OF BANK OF BARODA
REGARDING FINANCIAL INCLUSION

No-frills accounts, the beginning was modest. Encourage small

savings and enable customers to perform basic cash transactions
without imposing conditions of minimum balance maintenance. But
banks soon realized that by maintaining such a narrow focus and
seeking to enable only the most basic transactions such as account or
deposit creation among the unbanked community they are losing out on
perhaps a very lucrative market. While estimates differ, most put down
India’s bank account penetration somewhere between 40 and 50 per
cent.
1. Financial inclusion as a myth
There were not many accounts as were shown in registers. For instance,
there were around 4000+ no frill accounts opened in 2007 in one of the
branch of Dungarpur but CBS (core banking system) deleted the accounts

53
 which were having zero balance resulting only a megre of 52 accounts
remaining.
Bank employees gave keen attention to the banking rather than
financial inclusive growth or rural development.

2. Least interest of bank official:

Financial inclusion is often thought as a side work by the officials.
Also, for dealing with the rural communities frequently, one need to be posted
in those remote areas, so this also decreases interest for financial inclusion.
3. Communication gap:
Financial inclusion includes dealing with the rural people. And
convincing rural people to something new is something like meeting the two
ends of river. so there always remains a communication between the officials
and the customers resulting as limiting reagent to the financial inclusion.
4. Lack of awareness in rural people:
From where resources are not put into awareness raising
campaign, there resides always a danger that knowledge of the financial
services will remain restricted and the target groups of financially
excluded people are not benefited.
5. Sensitization in top official only:
Sensitization regarding the importance of financial inclusion has
been limited to the banking sector’s top level officers only, and it has yet
to reach the line functionaries – branch managers, branch staff and the like.
54
 This has also contributed to ignorance among the masses, in general and
the targeted groups (the ones financially excluded), in particular.

6. Unapproachable govt. schemes:

The long list of schemes like SGSY, SJSRY, PMEGP and SRMS can
be made effective only if they are known to people whom they target.
Except NREGA, there is hardly any news of the other GSSs in the media,
although the other schemes too have been devised with the sole aim of
poverty alleviation and ultimately, financial inclusion.
7. Problems with bad credit history customers:
The person with bad credit history (or staying in banks designated
negative areas) not being able to get a traditional bank loan. This is a
serious and complicated issue. Since some people living in these areas are
having high default rates, banks have declared them negative and do not
conduct business with residents of those areas. This although may be
justified to an extent, does punish the innocent too by denying them credit
and treating them at par with the willful defaulters.
In one case, a person seeks the bank for an educational loan. After
examining performance sheets of the child, the bank official thought that

55
 there were less chances of repayment of loan and hence he was deprived
of loan.
8. Inundated RBIs financial education site:
The financial education site launched by Reserve Bank on 14th
Nov, 07 is one of the first sites on financial education. The site available in
English, Hindi and 11 other regional languages has comic books dealing
with topics such as monetary policy, bank regulations, currency notes, etc

But has the site achieved its aim to promote true financial education.
A comparative study of popular financial education sites available on the
web throw some startling results, pointing out that the Reserve Bank’s
financial education website needs an overall change.
9.Indifferent behavior of bankers:
Poor households are often apprehensive about the indifferent
nature of bank personnel. This leads them to the clutches of
moneylenders who charge as exorbitant a rate as minimum 36% to 120%
per annum.

10.Ambiguity in charging interest:

interest rates are often difficult to understand, calculate, and

compare due to variables including associated fees, commissions,
savings requirements, and different methods of calculating interest.

56
 CHAPTER-5
Recommendations
From the diversity of households covered in our survey, the major
issue that came up was the lack of awareness among the masses (both
literate and the illiterate ones alike). Although Reserve Bank of India has
undertaken a myriad of initiatives to promote the cause of financial
inclusion, no mass sensitization has taken place yet. This is evident from
our survey findings, where only 59% people were having knowledge of
no-frills account. This is in spite of the fact that no-frill accounts have
been in existence since the last three years, if not more. Some of the
views that can help the flourishing of FI are as follows:

1. Marketing Agenda-

57
 The bottom up approach may comprise of different mechanisms.
Across households, whether rural or urban the consensus was on giving
wide publicity to financial inclusion promoting initiatives through
newspapers, posters, public gatherings, door- to-door leafleting, public
meetings, and advertising through print as well as non-print media
advertisements, etc. for illerate customer BOB can use innovative
techniques like projection of video clipping in local language, street play,
puppet show etc.

2. Integrating UIN with Financial Inclusion-

Unique Identification Number (UIN) can be a way to address the
identification challenges of Indian banks and the financial sector. The
UIN programme will be the first step towards a universal financial
inclusion. The impact on inclusive growth and India’s saving rate from
implementing this would be massive, considering that a large section of
the Indian population does not have a bank account.
The programme can be dovetailed with financial inclusion with all
Government cash transfers for instance NREGP, through the UIN linked
account. The national ID when integrated with SHGs, microfinance and
micro- insurance institutions, would link financing options for the poor
more closely with bank accounts. Each citizen of India having this UIN

58
linked bank account can truly claim the target of 100 % ‘comprehensive’
financial inclusion we aspire to achieve.
3. Training to bank employees-
The top-down approach comprised of training programmes being
conducted for branch managers should be more effective. Training
modules may be developed for the rural staff with special emphasis on
loans for agriculture and allied activities. The staff may be trained to
develop a positive attitude towards their customers.

4. Mass Communication-
Awareness of the GSSs and their benefits will also lead more people
to opt for them. This will also be beneficial to SHGs. For instance, in
Dungarpur SJSRY scheme is popular, so for seeking SME people opt for it.
The print media has a huge potential of creating mass awareness about
the measures being taken by the Reserve Bank for promoting financial
inclusion. Statistics also show that people prefer their regional language
newspapers,
Audio Visual aid like television can be an effective medium of
reaching the rural masses.

59
 The fast growing radio segment, registering an increase in listeners
with each passing day can also be utilized for promoting the cause of financial
inclusion/ financial literacy in rural areas.
What remains to be done is fast and effective implementation of
the already launched initiatives on a nationwide scale so as to bring the
benefits of the country’s economic growth to all and one.
5. Organize Smart Campaign:
Pricing transparency is at the core of the Smart Campaign’s
Client Protection Principles. In keeping with the Smart Campaign’s
goal of ensuring that pricing, terms, and conditions of financial
products are transparent and adequately should be disclosed in a form
understandable to clients.

6. Mobile banking-
Bank of Baroda should use new technologies like mobile phones
to reach low income consumers. It is possible that the telephone
providers themselves will start basic banking services like savings and
payments. Indian telecom consumers have few links to financial
institutions. So without much difficulty telecom providers can win the
battle with banks. Bank should therefore be proactive about transferring
this technology into an opportunity.

7. Social Monitoring-
60
 Bank of Baroda should monitor and improve its services in
microfinance in three key thematic areas: consumer protection, poverty
assessment and social performance measurement.
8. Financial Counseling Helpline-
A national helpline may be set up for providing financial counseling.
This can help in assisting customers even from rural areas to get information on
availability of credit and terms to comply with banks all over India contributing
their share for this helpline. It will be possible to create one having the capacity
of serving the entire country.

In order to ensure that poor rural households who are in more need
of such advice, and who have the least number of options available of
accessing such advice, ‘market segmentation’ can also be thought of. The
helpline may be made toll-free for calls from rural areas, while charging a
small fee for calls from urban centers.6

8. International workshops-

Such type of workshops should be supported by BOB with the

help of Universal Postal Union (UPU), the global governing body of
postal services and others. .Experts and policymakers from developing
countries will meet to share experiences and identify key success
factors in expanding financial access.

89. Research & Development-

61
 There should be separate effective department of R& D. It will
assist bank to develop new products like savings, micro insurance and
specialty credit products such as loans for clients to purchase renewable
energy devices. R&D will also help apply new technologies for
delivery (such as mobile banking).

1. 10. Improving Credit Linkage to BSVS Trainees-

There is enough number of BSVS trainees in dungarpur so
BOB has to improve credit linkage to these trainees. They can be self
employed and earn more.
11. Financial Education in School Curriculum-
Financial Education brought out the wide gulf existing between
financial literacy and literacy in general. Although simple interest and
compound interest calculations, problem on shares an dividend, etc were
being taught in class, financial literacy as a whole was missing in the
curriculum.
In this regard, RBI can join hands with the leading educational
boards in the country, those having a strong presence in rural areas, to
develop curriculum framework so as to promote basic financial education.
The subject may cover topics such as basic banking, importance of bank
account, developing a savings attitude, and initiatives taken to promote
financial inclusion and financial literacy.
Elementary economics can also be incorporated in the course.
Financial Markets Management (FMM), a joint certification course
introduced by NSE and CBSE for standard XI and XII is already in place.

62
 The course curriculum includes accounting for business, introduction to
financial markets, BPO skills, computer applications in financial markets,
economics, etc.
12. Connecting donors/ lenders and entrepreneurs-
In case of bad history scenario, microfinance or microcredit can play
a significant role in addressing this problem. There have been instances
where people with bad credit history have been provided with small amount
of loans, only to see it being repaid on time and with interest too. Since
banks are unwilling to serve these people, private donors contributing small
sums of money and aggregating to larger amounts, can come to the rescue.
13. Upgrading RBI’s Financial Education Website-
Users do visit the sites for financial education/ financial counseling.
So there remains little doubt that the site should be made more aligned to
financial counseling and at the same time public awareness regarding the
site is to be substantially raised.

The website consists of three parts covering information, services

and guidance. The workflow of a debt settlement process and consumer
insolvency proceedings are described as are the many practical notes on
what creditors are allowed to do and what they are not. Typical questions
from the debt counseling practice are answered here and first tips on how
to deal with financial problems are given. The site provides model letters
to apply for a Current Account for everyone.

14. Monetary Benefits-

63
 Manpower crunch in the interior bank branches of remote
locations lead to long standing queues results in work overload for the
staff and makes bank customers impatient.
To mitigate such stress causing situations, there is an urgent need
to adequately staff those branches having just two or three personnel.
Banks may also devise suitable incentive structures for rural posting
including monetary benefits, so as to make them lucrative. Branch
managers, with a rural background and inclination towards serving rural
people may be given preference while considering such postings.

15. New technology on the horizon-

The use of information and communication technology has great
potential to reduce transaction costs and allow for the expansion and
diversification of financial services. It also opens up new options for
non-bank players, such as mobile network operators or banking agents.
The bank must be strengthened with technical staff for provision
of developmental services in the farm and non-farm sectors. All banks
will make use of the advice provided by BOB.

64
16. Widen bank infrastructure-
Expansion of bank branches in rural areas for connecting
unlinked people to bank along with development of bank infrastructure,
such as credit bureaus and regulatory policy reform etc.

17. Other suggestions:

It should include-
• Reducing paper work or documentation

• Mobile Vans, Satellite Offices

65
• Strengthening channels for delivering new products
opening of financial advice centers

• Simplifying borrowing procedures

• Concentrate their efforts on empowering people so they
can make better use of already existing products awareness
campaigns
• Innovative models of delivery etc. at doorstep
• Increasing social welfare benefits
• Establish kiosk for providing information and solve their
queries
• Rethinking on negative areas marked by banks and among
many others.

ANNEXTURES
66
 ANNEXURE-1
QUESTIONNAIRE

1. Personal Details:

a. Name of customer

b. Number of family members

c. Occupation

d. Education Level

e. Income per annum

2. How many members in family covered under financial inclusion?

3. How family covered under financial inclusion?

a. Through loan c. Through insurance

b. By deposit accounts d. By any Other means

4. By what mean they connected through mainstream?

a. Self help group

b. Kisan Club

c. Baroda Swarojgar Vikas Sansthan

d. Baroda Grameen Paramarsh Kendra

5. Are you aware that bank is opening zero minimum balance in account?

a. Yes b. No

6. What was the reason for opening account?

67
 a. To receive payment through NREGA

b. To receive payment by other govt. scheme

c. For saving money

d. To request loan

e. If any other, specify—

7. In which bank do you have account?

a.Bank of Baroda

b. Baroda rural Grameen Bank e. PNB

c. Bank of Rajasthan f. SBI

d. S.B. B. J. g. any other

8. What was the purpose of connecting with BOB?

a. Dairy d. Agriculture

b. Vegetable production e. Rural artisan

c. Any other

9. Was the purpose achieved?

a. Yes b. No

10. Benefit regarding financial inclusion to the family?

a. Increase in saving habit d. Raise living standard

b. Increase in income e. any other

c. To repay debt

11. How much income increased after taking loan?

a. Yes b. No

68
12. Is the family regular in repaying loans?

a. Yes b. No

13. If not paid regularly what the other solution?

14. Difficulties faced by rural customer In connecting to the bank.

a. I have no/little money to put in

b. Lengthy process

c. Documentation

d. Few bank in remote area

e. Any other reason

15. After connected with bank how the bank employees are behave to the customers?

a. Cooperative c. ignorance

b. Guidance d. any other

16. Are you satisfied with banking services?

a. Yes b. No

17. Any suggestions regarding banking services?

ANNEXURE-2

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BIBLIOGRAPHY

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• Financial Inclusion: concept and strategies by Sujatha B.
• Financial inclusion by Deepak B Phatak, Sameer Kochhar,
R. Chandrashekhar .
• Financial Inclusion by Sohani AK.
• Economic Times:
Article 1- UID can be an enabler of financial inclusion- Nilekani dated
11th may, 10.
Article 2- RBI wants 3-year financial inclusion road map dated
4th feb, 10.
• CAB calling magazine: total Financial Inclusion- a success
story dated april-june, 07.
• BOB magazines: shatabdhi varsh ki pehal.
WEBOGRAPHY:
• www.bankofbaroda.com
• www.bankingfrontiers.com
• www.cysd.org/RuralLivelihood/training/
• www.karmayog.org
• www.infosysblogs.com
• www.centerforfinancialinclusionblog.wordpress.com
• www.wikipedia.org
• www.thehindubusinessline.com

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