An

INTERNSHIP REPORT
ON
DEVELOPMENT THROUGH
FINANCIAL INCLUSION

Submitted to-
Faculty of Management Studies
Banaras Hindu University

Submitted by -
Pushpanjali Roy
MBA (agribusiness) 3rd sem,

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Roll no.- 09381RG024
FMS BHU

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ACKNOWLEDGEMENT

I convey my sincere gratitude to Prof.S.K.Singh(Head & Dean),

Faculty of management studies, B.H.U for providing me an
opportunity to undergo this summer internship project.

I would like to express my sincere thanks to Mr. Rajiv Saxena,

Zonal Manager, Bank Of India, Varanasi for giving me a
chance to do my summer internship project in BANK OF INDIA ,
VARANASI. It was his sincere permission due to which I was able
to perform such a challenging project.

I am highly obliged to Mr. Ram Dular, Branch manager, Bank

of India, Phulpur for providing me his valuable guidelines,
support and for providing me an opportunity to undertake this
project. This project was a great opportunity for me to get a
firsthand experience of professional culture that exists in an
organization, about the market conditions that exist and qualities
required to work under various conditions.

I would also like to thank all the members of Phulpur branch for
their support and generous cooperation.

I can’t forget expressing my thanks to all the respondents,

because without their help my project would have remained
incomplete.

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The organizational culture of BANK OF INDIA changes a person on
philosophical, psychological and analytical levels. I came out of
BANK OF INDIA as a better person because of the learning that I
have gathered from these precious guides.

PUSHPANJALI ROY

MBA (AGRI-
BUSINESS)
IIIrd Semester

FMS, BHU

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TABLE OF CONTENTS

S.NO. PARTICULARS PAGE NO.

1. Acknowledgement I
2. Banking History 01
3. Introduction of Bank Of India 08
4. About the Project: Development Through 22
Financial Inclusion

5. Objectives 31
6. Research Methodology 32
7. Data Analysis 57
8. Findings 70
9. Suggestions 73
10. Questionnaire 75
11. Bibliography 76

Banking sector in India

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 Structure of the organised banking sector in India. Number of banks are in brackets.

Banking in India originated in the first decade of 18th century with The General Bank of India
coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are
now defunct. The oldest bank in existence in India is the State Bank of India being established as

6
"The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like
Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was
the most active trading port, mainly due to the trade of the British Empire, and due to which
banking activity took roots there and prospered. The first fully Indian owned bank was the
Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as Punjab National
Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded
under private ownership. The Reserve Bank of India formally took on the responsibility of
regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve
Bank was nationalized and given broader powers.

Early history
At the end of late-18th century, there were hardly any bank in India in the modern sense of the
term. At the time of the American Civil War, a void was created as the supply of cotton to
Lancashire stopped from the Americas. Some banks were opened at that time which functioned
as entities to finance industry, including speculative trades in cotton. With large exposure to
speculative ventures, most of the banks opened in India during that period could not survive and
failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently,
banking in India remained the exclusive domain of Europeans for next several decades until the
beginning of the 20th century.

The Bank of Bengal, which later became the State Bank of India.

At the beginning of the 20th century, Indian economy was passing through a relative period of
stability. Around five decades have elapsed since the India's First war of Independence, and the
social, industrial and other infrastructure have developed. At that time there were very small

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banks operated by Indians, and most of them were owned and operated by particular
communities. The banking in India was controlled and dominated by the presidency banks,
namely, the Bank of Bombay, the Bank of Bengal, and the Bank of Madras - which later on
merged to form the Imperial Bank of India, and Imperial Bank of India, upon India's
independence, was renamed the State Bank of India. There were also some exchange banks, as
also a number of Indian joint stock banks. All these banks operated in different segments of the
economy. The presidency banks were like the central banks and discharged most of the functions
of central banks. They were established under charters from the British East India Company. The
exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade.
Indian joint stock banks were generally under capitalized and lacked the experience and maturity
to compete with the presidency banks, and the exchange banks. There was potential for many
new banks as the economy was growing. Lord Curzon had observed then in the context of Indian
banking: "In respect of banking it seems we are behind the times. We are like some old fashioned
sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments."

Under these circumstances, many Indians came forward to set up banks, and many banks were
set up at that time, a number of which have survived to the present such as Bank of India and
Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank.

During the Wars

The period during the First World War (1914-1918) through the end of the Second World War
(1939-1945), and two years thereafter until the independence of India were challenging for the
Indian banking. The years of the First World War were turbulent, and it took toll of many banks
which simply collapsed despite the Indian economy gaining indirect boost due to war-related
economic activities. At least 94 banks in India failed during the years 1913 to 1918 as indicated
in the following table:

Number of banks Authorised capital Paid-up Capital

Years
that failed (Rs. Lakhs) (Rs. Lakhs)
1913 12 274 35
1914 42 710 109

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1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1

Post-independence
The partition of India in 1947 had adversely impacted the economies of Punjab and West
Bengal, and banking activities had remained paralyzed for months. India's independence marked
the end of a regime of the Laissez-faire for the Indian banking. The Government of India
initiated measures to play an active role in the economic life of the nation, and the Industrial
Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted
into greater involvement of the state in different segments of the economy including banking and
finance. The major steps to regulate banking included:

• In 1948, the Reserve Bank of India, India's central banking authority, was nationalized,
and it became an institution owned by the Government of India.

• In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India."

• The Banking Regulation Act also provided that no new bank or branch of an existing
bank may be opened without a licence from the RBI, and no two banks could have
common directors.

However, despite these provisions, control and regulations, banks in India except the State Bank
of India, continued to be owned and operated by private persons. This changed with the
nationalization of major banks in India on 19th July, 1969.

Nationalisation
By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy. At the same time, it has emerged as a large employer, and a
debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-

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then Prime Minister of India expressed the intention of the GOI in the annual conference of the
All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The
paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and
the GOI issued an ordinance and nationalised the 14 largest commercial banks with effect from
the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the
step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the
Parliament passed the Banking Companies (Acquition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9th August, 1969.

A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated
reason for the nationalisation was to give the government more control of credit delivery. With
the second dose of nationalisation, the GOI controlled around 91% of the banking business of
India.After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to
the average growth rate of the Indian economy.

Liberalisation
In the early 1990s the then Narasimha Rao government embarked on a policy of liberalisation
and gave licences to a small number of private banks, which came to be known as New
Generation tech-savvy banks, which included banks such as UTI Bank(now re-named as Axis
Bank) (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This
move, along with the rapid growth in the economy of India, kickstarted the banking sector in
India, which has seen rapid growth with strong contribution from all the three sectors of banks,
namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed relaxation in the norms
for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights
which could exceed the present cap of 10%,at present it has gone up to 49% with some
restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 4-6-4 method (Borrow at 4%;Lend at 6%; Go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this

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led to the retail boom in India. People not just demanded more from their banks but also received
more.

Current situation
Currently (2007), banking in India is generally fairly mature in terms of supply, product range
and reach-even though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to
have clean, strong and transparent balance sheets relative to other banks in comparable
economies in its region. The Reserve Bank of India is an autonomous body, with minimal
pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage
volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-especially in
its services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong. One may also expect M &As, takeovers, and asset
sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak
Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed
to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any
stake exceeding 5% in the private sector banks would need to be vetted by them.

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Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is
with the Government of India holding a stake), 29 private banks (these do not have government
stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They
have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by
ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

INTRODUCTION OF BANK OF INDIA

HISTORY:-

Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from
Mumbai. The Bank was under private ownership and control till July 1969 when it was
nationalised along with 13 other banks.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees,

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the Bank has made a rapid growth over the years and blossomed into a mighty institution with a
strong national presence and sizable international operations. In business volume, the Bank
occupies a premier position among the nationalised banks.

The Bank has 2884 branches in India spread over all states/ union territories including 155
specialised branches. These branches are controlled through 48 Zonal Offices . There are 27
branches/ offices (including three representative offices) abroad.

The Bank came out with its maiden public issue in 1997 and follow on Qualified Institutions
Placement in February 2008. . Total number of shareholders as on 30/06/2008 is 2,29,000.

While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of
introducing various innovative services and systems. Business has been conducted with the
successful blend of traditional values and ethics and the most modern infrastructure. The Bank
has been the first among the nationalised banks to establish a fully computerised branch and
ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a
Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in
1982, for evaluating/ rating its credit portfolio.

The Bank's association with the capital market goes back to 1921 when it entered into an
agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is an
association that has blossomed into a joint venture with BSE, called the BOI Shareholding Ltd.
to extend depository services to the stock broking community. Bank of India was the first Indian
Bank to open a branch outside the country, at London, in 1946, and also the first to open a
branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of 27
branches (including three representative offices) at key banking and financial centres viz.
London, Newyork, Paris, Tokyo, Hong-Kong, and Singapore. The international business
accounts for around 20.10% of Bank's total business.

Organization

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 Name of the Bank - Bank Of India

 Established in Sept. 07, 1906

 Head office - MUMBAI

 ZONAL OFFICES - 48
 BRANCHES - 2883
 EXTENTION COUNTER - 91
 TOTAL OUTLETS - 2974

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VISION AND MISSION

VISION-
“To become the bank of choice for corporate, medium business and up market retail customers
and developmental banking for small business, mass market and rural markets.”

MISSION-
“To provide superior, proactive banking service to niche markets globally, while providing cost
effective, responsive service to others in our role as a development bank, and so doing, meet the
requirements of our stake holders.”

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FINANCIALS
(Rs
Annual results in brief crore)

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sales 12,355.22 9,180.33 7,028.70 6,031.52 5,795.90
Operating profit 8,693.73 5,709.77 4,128.00 3,099.86 3,153.37
Interest 8,125.95 5,739.86 4,396.72 3,794.64 3,594.47
Gross profit 3,701.21 2,394.99 1,701.22 1,460.36 2,241.87
EPS (Rs) 38.21 23.01 14.37 6.97 20.66

Annual results in details

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Other income 2,116.93 1,562.95 1,184.38 1,155.80 1,791.99
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 1,657.01 1,614.00 1,328.13 1,263.21 1,172.43
Excise - - - - -
Admin and selling expenses - - - - -
Research and development
- - - - -
expenses
Expenses capitalised - - - - -
Other expenses 987.98 994.43 787.01 669.11 579.12
Provisions made 1,016.50 862.13 785.56 999.34 890.98
Depreciation - - - - -
Taxation 675.31 409.69 214.22 120.97 342.57
Net profit / loss 2,009.40 1,123.17 701.44 340.05 1,008.32
Extra ordinary item - - - - -
Prior year adjustments - - - - -
Equity capital 525.91 488.14 488.14 488.14 488.14
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 1865.95 1488.22 1488.20 1488.20 1488.19
Agg.of non promotoHolding (%) 35.53 30.53 30.53 30.53 30.53

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OPM (%) 70.36 62.20 58.73 51.39 54.41
GPM (%) 25.57 22.29 20.71 20.32 29.55
NPM (%) 13.88 10.45 8.54 4.73 13.29

Balance sheet

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of funds
Owner's fund
Equity share capital 488.14 488.14 488.14 488.14 488.14
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 5,257.75 4,338.39 3,811.12 3,347.20 2,869.07
Loan funds
Secured loans - - - - -
Unsecured loans 1,19,881.74 93,932.03 78,821.44 71,003.12 64,453.60
Total 1,25,627.63 98,758.57 83,120.70 74,838.46 67,810.81
Uses of funds
Fixed assets
Gross block 1,733.50 1,674.00 1,575.00 1,459.92 1,330.77
Less : revaluation reserve 149.48 157.35 165.61 174.32 183.57
Less : accumulated depreciation 955.61 874.71 783.41 687.19 603.08
Net block 628.40 641.94 625.97 598.40 544.12
Capital work-in-progress 11.41 10.68 22.59 25.86 9.01
Investments 35,492.76 31,781.75 28,202.62 27,162.89 24,434.84
Net current assets
Current assets, loans & advances 3,013.50 3,062.83 2,422.55 2,484.67 1,824.09
Less : current liabilities &
9,239.05 7,464.44 5,729.92 5,326.43 4,605.47
provisions
Total net current assets -6,225.55 -4,401.62 -3,307.37 -2,841.75 -2,781.38
Miscellaneous expenses not
- - - - -
written
Total 29,907.03 28,032.75 25,543.81 24,945.40 22,206.60
Notes:
Book value of unquoted
- - - - -
investments
Market value of quoted
- - - - -
investments

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 Contingent liabilities 71,927.74 69,930.86 68,571.04 56,888.90 42,575.88
Number of equity
4874.02 4874.00 4874.00 4873.99 4873.95
sharesoutstanding (Lacs)

Share holding pattern as on : 31/03/2008 31/12/2007 30/09/2007

Face value 10.00 10.00 10.00
No. Of Shares % Holding No. Of Shares % Holding No. Of Shares % Holding

Promoter's holding
Indian Promoters 338580000 64.47 338580000 69.47 338580000 69.47
Sub total 338580000 64.47 338580000 69.47 338580000 69.47
Non promoter's holding
Institutional investors
Banks Fin. Inst. and Insurance 47589339 9.06 17840492 3.66 17601063 3.61
FII's 79308142 15.10 79735627 16.36 80117925 16.44
Sub total 141443767 26.93 106337034 21.82 106234400 21.80
Other investors
Private Corporate Bodies 6638992 1.26 4964337 1.02 4561636 0.94
NRI's/OCB's/Foreign Others 3547984 0.68 3444147 0.71 3620469 0.74
Govt 750 - 750 - 750 -
Sub total 10187726 1.94 8409234 1.73 8182855 1.68
General public 34963307 6.66 34075932 6.99 34404645 7.06
Grand total 525174800 100.00 487402200 100.00 487401900 100.00

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Profit before tax 1,532.86 915.65 461.02 1,406.96 1,160.18
Net cash flow-operating activity 5,111.96 3,380.52 -777.66 1,588.67 291.66
Net cash used in investing activity -67.53 -99.63 -107.52 -141.05 -81.10
Net cash used in fin. activity 915.12 638.84 -146.52 112.38 182.16
Net inc/dec in cash and equivalent 5,959.56 3,919.73 -1,031.70 1,560.00 392.72
Cash and equivalent begin of year 11,445.98 7,526.25 8,557.95 6,997.95 6,605.23

Cash flow
PERFORMANCE HIGHLIGHTS- FOR THE YEAR 08-09 (RS. IN CRORES)

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 MAR.2008 MAR.2009 CHANGE

Net Profit 2009.40 3007 INC.49.68 %

Gross NPA% 1.68 1.71 INC 0.03 %

Net NPA 0.52 0.44 DEC 0.08 %

Total business 264805 334440 INC 26.30 %

Total deposits 150012 189708 INC 26.46 %

Gross credit 114793 144732 INC 26.08 %

Earnings per share 40.83 57.26 INC 40.24 %

PERFORMANCE HIGHLIGHTS 31ST MARCH 2009

• Bank now has presence at 28 locations in 15 countries across 4 continents with the setting
up 2 outfits- a branch at Glasgow (UK) & representative office in Dubai.

• 118 new branches have been opened & 20 extension counters converted to branch, thus
increasing domestic outlets to 3091.

• 62% of branches are in rural and semi urban areas, thus providing a crucial advantage for
intrusive financial inclusion happening throughout the country.

• Priority sector advances stood at 47% of net adjusted credit and agriculture financing
grew by 24% despite the huge reduction in outstanding on account of loan waiver.

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 • Bank’s assistance to SME sector recorded growth of 25% and educational loan portfolio
grew by robust 31%.

• Bank has achieved 100% connectivity for all branches under Core Banking Solution
Network.

• Bank’s joint venture insurance company- Star Union Dai Ichi Life Insurance Company
Ltd has become fully operational.

• Solar power is extensively used in remote branches making technology initiative as

“Green Projects”.

• Prestigious awards received by the Bank:

➢ India’s best PSU bank by NDTV business leadership awards 2008.
➢ No.1 public sector bank by Business World- PWC survey.
➢ Ranked no. 1 by Business Today- KPMG survey.

SWOT ANALYSIS

 STRENGTH-

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 Government ownership of the bank gives cutting edge over private sector bank.

 Our status as one of the large public sector banks and major player in the industry plays
important role in the marketing of deposit products.

 Wide network of branches gives us platform to reach wide spectrum of customers.

 WEAKNESS-

 The Bank’s operating costs are high as compared to the peer banks.

 Productivity per employee is low as compared to the peer banks.

 Marketing of new products lack required vigor from staff.

 Average cost of domestic deposit is higher as compared to the peer banks.

 OPPURTINITIES-

• Diversified business opportunities provide good scope for expansion.

• Technological innovations have expanded the horizon of banking services and are
presenting numerous opportunities.

• Liberalized economy has prescribed business potential for the banking sector and retail is
one such area.

 THREATS-

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• Competition is eating in to our market share. Other banks have professional approach
we should also learn it and use it to development of business.

• Customer loyalty cannot be taken for granted. We should develop best relationship with
our customers and CRM at the branches.

• Internet banking will make the branch network redundant in the urban and metropolitan
centers

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PRODUCT AND SERVICES OF BANK OF INDIA

 CROP FINANCING
 FARM MACHANISATION IMPLIMENTS AND EQUIPMENTS
 FINANCING FOR DRAUGHT ANIMALS AND CARTS
 LAND DEVELOPMENT
 POULTRY DEVELOPMENT
 PURCHASE OF LAND FOR AGRICULTURE PUPOSE
 RURAL GODOWNS SCHEME
 BOI SATABDI KRISHI VIKAS CARD
 KISAN CREDIT CARD
 KISAN SAMADHAN CARD
 STAR BHOOMIHIN CARD
 STAR HOME LOAN
 STAR EDUCATION LOAN
 STAR PERSONAL LOAN/STAR AUTO FIN
 STAR HOLIDAY LOAN
 STAR IPO
 STAR MORTGAGE LOAN
 STAR SECURITIES ADVANCE SCHEME

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PRODUCTS OF BANK OF INDIA

The basic function of bank is to accept deposits from the public for the purpose of lending and
investments. Bank has to pay interests on the deposits, which is their expenditure, and they earn
interest on their lending & investments, which is their income.

The difference between income and expenditure is the profit of the bank. More precisely,
differences between cost of funds and return on advances is called “spread” which is getting
shrunken day by day due to stiff competition amongst the bankers to increase their advances by
offering lower rates of interests.

DEPOSIT SCHEMES:

The main deposit schemes are:

 Saving bank accounts: Convenience of savings account and returns of fixed deposit, star
savings plus offers a host of benefits in a minimum balance of just Rs. 25,000.
 Current deposit account: A high –powered current account. Automatically transfers
excess amount of minimum stipulated balance to fixed deposits ensuring higher returns
from idle funds.

 Recurring deposits: The deposits are meant for regular monthly savings.

 Term deposit

 FDR/SDR,MIC/QIC,DBD/CASH CERTIFICATES,BOI Saving plus, BOI Floating Rate

Deposits, Schemes for Senior Citizens, BOI C/D Plus A/c and Special Deposit Product
for High Value Deposit Customers.

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OTHER DEPOSITS:

• BOI Floating Rate Deposit Scheme: For high net worth individuals, firms ,companies,
societies ,trusts and other corporate bodies, deposit of minimum amount Rs.5 lakhs for a
tenure of 91 days to 5 years will earn variable interests.
• Savings plus and CD plus accounts.
• Star savings silver, Gold and diamond accounts.
• Star Gold and diamond current account scheme.
• Star Diamond plus account :.High value customers get personal relationship manager,
free ATM cum Debit Card, Standing instructions, internet banking, ATM Banking Door
Step Banking, Instant Credit of outstanding cheques.
• Super savings plus and super CD Plus scheme.

These schemes cater to the needs of all segments of society.

There are different new products which are as follows:

DEPOSIT SCHEMES FOR SENIOR CITIZENS-

Senior citizens are those who has completed the age of 60 years of age There rate of interest is
0.50% additional value over the applicable rate for 6 months deposits and 1 % more for deposits
of one year and above. Nomination facility is available.

BOI SAVINGS PLUS SCHEME-

This is a combination of short term deposit schemes and saving bank scheme with very attractive
features. The facility is available at fully computerized branches.

BOI CURRENT DEPOSIT PLUS ACCOUNT-

The product is mix of current deposit accounts and short deposit

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Accounts. The account is eligible for corporate proprietorships and partnership etc. maintaining
minimum average balance of Rs.2 lakhs.

BASIC SAVINGS BANK ACCOUNT-

The product is offered to the adult individual who wants to open account for limited transaction
purpose and is not filling the income tax return. The acconts are opened as per the RBI
guidelines.

SHATABDI DEPOSIT SCHEME-

The scheme is launched in order to encourage long term savings with assurances of complete
safety high rate of returns.

CARD PRODUCTS-

GOLD INTERNATIONAL CREDIT CARD: Customers having savings, current and overdraft
accounts can use at all Bank of India ATMs, ATMs under cash tree network, BANCS and all
ATMs that display the logo world wide.

CREDIT CARDS:

• INDIA CARD- A value for money- card that offers tremendous benefits at minimal fees
to salaried and self employed individuals. All card holders are covered for air and all
other accidents apart from regular privileges.

• GOLD CARD VISA- For salaried and self employed customers with an annual income
of Rs.1,50,000 and above Visa Gold Card holders are covered for up to Rs 8 lakhs in case
of air accidents and for Rs.4 lakhs in all other cases apart from regular privileges.

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• GOLD INTERNATIONAL VISA- Accepted at all Visa locations anywhere in the world
for cash withdrawls at over 8 lakhs ATMs or for swiping at any of the 4 lakhs in all other
cases apart from regular privileges.

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 DEVELOPMENT THROUGH FINANCIAL INCLUSION

INTRODUCTION

"If we stop thinking of the poor as victims or as a burden and start recognizing them as
resilient and creative entrepreneurs and value conscious consumers, a whole world of
opportunity will open up.”

– C.K. Prahalad
Management guru

Financial Inclusion in broad terms, can be defined as the inclusion of vast segments of
disadvantaged and low income groups of the society under the services of the banking sector,
thereby providing them the privilege of banking services at an affordable cost. World over,
recognizing the importance of inclusive growth, there are efforts towards making the financial
system more inclusive. In India, the Committee on Financial inclusion, chair manned by Dr. C.
Rangarajan, has suggested a National Mission on Financial inclusion and observed that financial
inclusion must be taken up in a mission mode. Getting connected with the banking system would
enable people to avail a range of transaction and payment services, access to affordable credit,
insurance and safe savings products. It has been noticed that people without bank accounts are
often the most vulnerable and impoverished. Not having a bank account excludes these people
from simple credit products also, making them more likely to turn to predatory or even illegal
lenders leaving them in perpetual debt.

Some facts about India's banking infrastructure:

• India has the world's most extensive banking infrastructure.

• There are about 60,000 retail credit outlets of the formal banking sector comprising
12,000 branches of district level cooperative banks, over 14,000 branches of
Regional Rural Banks and over 30,000 rural and semi-urban branches of

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 commercial banks, in addition to 112,000 cooperative credit societies at the village
level.

• There is at least one retail credit outlet on an average for about 5,600 rural people or
every 1,100 households, which can be expected to meet the financial needs of the entire
rural population.

The Real situation:

• According to NSSO (2008), 45.9 million households (51.4% of 89.3 million) have yet
not accessed credit from institutional or from non institutional sources.

• As on June 2002, 22.9 million households (58.5%) accessed credit amounting to Rs

47,820 crore (42.9%) from non institutional sources. The amount per household worked
out to be Rs 20,882. Interest rate charged by non institutional agencies was 28.58% per
annum as against 12.48% charged by institutional agencies.

• Only 24% of the rural households with assets of less than Rs 15,000 had accessed credit
from institutional credit agencies.

• As on 2007, Savings Accounts and Credit accounts per 1000 population in rural areas
were only 26 and 65 respectively.

• As on June 2007, 1 branch catered to the needs of 16,000 population.

A vast segment of India's population exists on the margins of India's financial systems. Whilst
the per-capita savings of this class may not be very high their sheer number means that taken
together their savings are of a considerable amount. If their entry in the formal financial sector is
made easier these savings can be channelized for the formal economy. Also savings cum risk
products that are their primary need can be structured for them once they are part of the formal
banking system.

29
Various Aspects of Financial Inclusion:

Financial Inclusion: Methodology

1. Enrolment Process
Data Collection System
Demographic Details
Biometric Details etc.

30
 2. Issuance of
Biometric Enabled
Multi-Function Card
Diverse points of usage
Hand-held devices

3. Financial Transactions
through Field Devices
Single Device supports
multiple application

4. Transaction
data loading
to Integrated
Back-end system &
then to CBS

Challenges in financial inclusion:

a. From Demand Side

i. Lack of awareness about financial services and products

ii. Limited literacy especially financial literacy of the populace.

31
iii. Social exclusion.
iv. Many generic financial products are unsuitable for the poor.
v. Lack of adequate efforts to design products suitable to their needs.
vi. Delay in dispension of credit.
vii. Lack of empathy among the functionaries.
viii. Lack of transparency in charges.
ix. Burdensome terms and conditions as perceived by users.

a. From Supply side

i. Heavy transaction cost ab-initio

ii. Uncertainty of potential business in the space.
iii. Lack of robust technology.
iv. Enormity of members- large number of people to be serviced.

Opportunities in Financial Inclusion

1. Major chunk of population based in rural areas whose income level is quite low. Due to
regional disparities in economic development, there is large migration in labour force to
far off places, leaving behind their dependents at their village home.

For remittance services, the senders have to depend mainly on informal sector and they
have to pay heavy commission for this.

2. Income level of rural mass or urban poor increases, demand for goods and services
produced by manufacturing services sector will also increase. This will put demand on
the banks for credit dispension for acquisition of the goods and services produced by
the expanding manufacturing and services sector.

3. Experiences in several other countries like Bangladesh, Srilanka etc. and SHG/JLG
experiment in India has proved that “Small is bankable”.

Large number of people coming to the banking fold will provide a banking
opportunity on sustained basis.

4. Government of India has implemented NREGA programme throughout the country

ensuring minimum 100 days employment in a year. GOI or state governments desire use

32
 of bank’s delivery channels for the benefit of the beneficiaries. This will bring a good
float fund and/or distribution commission.

5. Government has planned for huge social sector investment to cover the vast majority of
people who may not be able to afford education, skill development of their own, primary
medical facilities etc. These investments to be routed through banking system.

6. Due to large gap in the supply side of food items, the Government of India desires the
growth to take place in agriculture which is now being termed as another green
revolution to take care of food security of growing population of the country.

Calls for credit linkage in a big way to the farmers and others who are/will be engaged
in production, collection, preservation, processing and distribution of food items. So,
demand for credit will certainly increase in a big way.

7. Higher growth in agriculture and rural areas coupled with demographic dividend
(working age group of 15-65) will lead to rise in savings level for financing the
increasing level of investments.

Financial Inclusion and Development:

Financial inclusion refers to a process that ensures the ease of access, availability and usage of
the formal financial system for all members of an economy. An inclusive financial system has
several merits.
• It facilitates efficient allocation of productive resources and thus can potentially reduce
the cost of capital.
• In addition, access to appropriate financial services can significantly improve the day-to-
day management of finances.
• An inclusive financial system can help in reducing the growth of informal sources of
credit (such as money lenders), which are often found to be exploitative.

Thus, an all-inclusive financial system enhances efficiency and welfare by providing avenues for
secure and safe saving practices and by facilitating a whole range of efficient financial services.
The importance of an inclusive financial system is widely recognized in the policy circle and
recently financial inclusion has become a policy priority in many countries. Initiatives for
financial inclusion have come from the financial regulators, the governments and the banking
industry. Legislative measures have been initiated in some countries.

For example, in the United States, the Community Reinvestment Act (1997) requires banks
to offer credit throughout their entire area of operation and prohibits them from targeting only
the rich neighbourhoods. In France, the law on exclusion (1998) emphasises an individual’s right
to have a bank account. In the United Kingdom, a ‘Financial Inclusion Task Force’ was
constituted by the government in 2005 in order to monitor the development of financial
inclusion.

33
The banking sector has taken a lead role in promoting financial inclusion.
➢ In India, the Reserve Bank of India (RBI) has initiated several measures to achieve
greater financial inclusion, such as facilitating ‘no-frills’ accounts and “General Credit
Cards” for low deposit and credit.
➢ The German Bankers’ Association introduced a voluntary code in 1996 providing for an
‘everyman’ current banking account that facilitates basic banking transactions.
➢ In South Africa, a low cost bank account called ‘Mzansi’ was launched for financially
excluded people in 2004 by the South African Banking Association.
➢ Alternate financial institutions such as micro-finance institutions and Self-Help Groups
have also been promoted in some countries in order to reach financial services to the
excluded.

A Government Committee on financial inclusion in India defines

financial inclusion as the process of ensuring access to financial services and timely and
adequate credit where needed by vulnerable groups such as the weaker sections and low
income groups at an affordable cost (Rangarajan Committee, 2008).

Of the issues raised in academic debates, an important question is whether economic

development leads to an all-inclusive financial system. It has been observed that even ‘well-
developed’ financial systems such as those in the US and the UK have not succeeded to be ‘all-
inclusive’ and certain segments of the population remain outside the formal financial systems.
Another issue of interest is whether low level of financial inclusion is associated with high
income inequality relationship between financial inclusion and development.

Index of Financial Inclusion (IFI):

The index of financial inclusion is a measure of inclusiveness of the financial sector of a country.
It is constructed as a multidimensional index that captures information on various aspects of
financial inclusion such as banking penetration, availability of banking services and usage of the
banking system. The IFI incorporates information on these dimensions in one single number
lying between 0 and 1, where 0 denotes complete financial exclusion and 1 indicates complete
financial inclusion in an economy. Sarma (2008) has developed a method of computing the IFI
for several dimensions of financial inclusion. Based on the availability of comparable data,
Sarma (2008) has computed the values of IFI for 54 countries using the three basic dimensions
of financial inclusion–
accessibility, availability and usage of banking services.

34
Accessibility has been measured by the penetration of the banking system proxied by the number
of bank A/C per 1000 population. Availability has been measured by the number of bank
branches and number of ATMs per 100,000 people. The proxy used for the usage dimension is
the volume of credit plus deposit relative to the GDP.

A comparison of IFI with human development index (HDI) shows that all the countries
with high and medium IFI values belong to the group that is classified by the UNDP as
countries with high human development (HDI > 0.7). While having a low value of IFI, India
performs better than its neighbours Pakistan and Bangladesh.

• Income as measured by per capita GDP is an important factor in explaining the level of
financial inclusion in a country.
• Going beyond per capita GDP, we find that income inequality, adult literacy and
urbanisation are also important factors.
• Further, physical and electronic connectivity and information availability, indicated by
road network, telephone and internet usage, also play positive role in enhancing financial
inclusion.

These findings strengthen the assertion that financial exclusion is indeed a reflection of social
exclusion, as countries having low GDP per capita, relatively higher levels of income inequality,
low rates of literacy, low urbanization and poor connectivity seem to be less financially
inclusive.

Undoubtedly, financial inclusion is one of the key elements that will give a thrust to financial
deepening and thus economic growth, given that India has over 50 per cent of the population
which has no access to banking. Financial deepening encompasses the increase in the stock of
financial assets. From this perspective, financial deepening implies the ability of financial
institutions in general, to effectively mobilise financial resources for development. This view
accepts the fact that a financial system’s contribution to the economy depends on the quality and
quantity of its services and the efficiency with which it performs them.

A high level of financial deepening is a necessary condition for accelerating growth in an

economy. This is because of the central role of the financial system in mobilising savings and
allocating the same for the development process.

• The financial system serves as a catalyst to economic development through various

institutional structures. The system vigorously seek out and attract the reservoir of
savings and idle funds and allocate same to entrepreneurs, businesses, households and
government for investments projects and other purposes with a view of returns. This
forms the basis for economic development.

35
 • The financial system play a key role in the mobilisation and allocation of savings for
productive, use provide structures for monetary management, the basis for managing
liquidity in the system.

• It also assists in the reduction of risks faced by firms and businesses in their productive
processes, improvement of portfolio diversification and the insulation of the economy
from the vicissitudes of international economic changes. Additionally, the system
provides linkages for the different sectors of the economy and encourages a high level of
specialisation expertise and economies of scale.

Objective:

36
To develop Financial Inclusion strategies for Bank of India in Phoolpur region of
Varanasi Zone.

• To study existing policy of Financial Inclusion of Bank of India.

• To study the implementation of Financial Inclusion by Bank of India with respect to
its existing policy.
• To formulate strategies for financial inclusion.

RESEARCH METHODOLOGY
Research design:

This study has been descriptive. Data was collected through survey with structured data
collection method i.e. a formal questionnaire was prepared with questions in a prearranged
format and sequence. In addition to this informal questions were also asked.

Research Technique:

Questionnaire survey: The questionnaire survey method was used for data collection to obtain
data from the respondents.

Research Tool:

Interpretation is based on percentage analysis.

Sampling:

The sampling technique used in the study is convenient sampling.

Elements: Customers of the bank, bank personnel and the residents in Phoolpur region.

Sampling units: Phoolpur region of Varanasi district

Period of study conducted: May-June, 2010

Sampling size: 50

37
Secondary data

Secondary data means data that are already available i.e. they refer to the data which have
already been collected and analyzed by someone else. When the researcher utilizes secondary
data, then he/she has to look into various sources from where he can obtain them. In this case
s/he is certainly not confronted with the problems that are usually associated with the collection
of original data.

• Internet
• Books

Primary data

Primary data are those that are collected fresh and for the first time and this happen to be original
in character. There are several methods of collecting primary data.

a) Observation method

b) Through Questionnaires

c) Interview method

d) Through schedules

Data Collection Stage:

Stage I:

Gathering the Information about Financial Inclusion Plan 2010-2013, of BOI.

Information about various aspects of FIP 2010-2013, of BOI was collected. The basic source was
the literatures of BOI.

Stage-II:

Gathering the information about no. of no frill accounts opened in the month of FI 2010.

38
The personal interviews were conducted with customers about financial inclusion and their
impact on their development.

Stage III:

Information Handling

The collected information is handed over to our project guide, then a detail discussion took place
on the information and final decision is taken whether to further proceed on it or not.

Stage IV:

Data Analysis

The data collected about various prospect, is analyzed and a clear picture about the programmes
and their impact is obtained and it is presented to the top management.

Scope:

The research was conducted only in the Phoolpur area of Varanasi district about various aspects
of financial inclusion and the steps taken by BOI to implement it. So can’t be represented at
national level but can be a helpful tool for further study in this area to students, researchers,
academicians etc. This study will also help BOI, Phulpur branch to understand the extent of
Financial Inclusion in the region.

Limitation:

➢ Accuracy of data depends upon the ability & willingness of the respondents.
➢ Unwillingness of respondents to share information.
➢ As the primary data about customer satisfaction and customer relation’s is collected
through convenient sampling so the exact scenario could be different than the analysis
show.
➢ Respondents were reluctant to answer questions as they were not aware of the importance
of the project and topic.
➢ Availability of respondents for questioning was also limited due to summer season.

39
 ➢ In some cases education level of respondent was a limiting case.

Secondary data are available in the scattered manner due to which problem arises in
summarization of data. Also the requirements of customers were very much scattered in terms of
size & specifications.

AREA OF STUDY-

The study was conducted in Phulpur region of Varanasi district . It is approx 35 kilometres away
from Varanasi. The villages under Bank of India, Phulpur are:

Khalispur, Mani, Vikrampur, Devji, Katawna, Bharauna, Parsara, Gauria, Hiramanpur,

Nadoi and Gajokhar.

40
Bank of India’s existing policy for Financial Inclusion:

Bank of India has deepened its investment in several critical area required for inclusive growth in
country strengthened its commitment to create conditions for the empowerment of the low
income segment of the people. The bank is making modest efforts towards improvement of basic
health, elementary education, access to financial services, strong civil society and environmental
sustainability. Bank of India desires to be one of the largest partners in economic growth and
development in days ahead.

Bank of India proposes to ensure fair, timely and adequate access to financial services, viz.
savings, credit, payment/remittance facilities, and insurance services at an affordable cost in a
fair and transparent manner to the excluded segment of the populace.

Bank of India has framed the Financial Inclusion Plan 2010-2013 through which it proposes to
provide banking facilities in all villages having populations above 2000. The Bank aims to
provide banking services to all households allotted to the Bank in villages having population
above 2000 within the stipulated time frame. Providing banking services means-
(1) no frill accounts with inbuilt overdraft facility of Rs 500, each in respect of all eligible
persons to be opened
(2) each household to be provided with either a GCC/KCC facility based on the activity they
choose for livelihood.

Bank has designed special strategies regarding the implementation, reporting and monitoring of
the FIP 2010-2013.
Implementation strategy includes
➢ Appointment of Business Correspondents on a large scale.
➢ Biometric cards to be issued to existing no frill account holders as well.
➢ All services to be provided through Business correspondents (BCs).
➢ Credit decision or sanction will remain with the branches but BCs are to be used effectively
for other credit related activities like mobilization of applications, filling up of application
forms, documentation, ensuring end use of funds and recovery etc.

Regarding the reporting of the FIP 2010-2013 to the Bank’s head office,
➢ Branches should open no frill account under scheme codes SB-104 or SB-105.
➢ Only these no frill accounts are to be reported by the zones.
➢ Bank will be switching over to generation of all MIS related to FIP, very soon.

41
Regarding monitoring the FIP 2010-2013, quantity and quality of business mobilized through
BCs are to be monitored closely.

Bank of India’s FI initiatives:

 Opening of no frill account and simpler KYC norms.

 Branch and ATM expansion

 Scaling up of IT initiatives

-smart cards for opening bank account with biometric identification will help the
customers get banking services near their doorstep.

-link to mobile hand held electronic devices for banking transactions with due
consideration of technology, security standards and customer protection.

 Customer acquisition and servicing

-through the branch

-through business correspondents

 Product development: easier credit facilities through KCC/GCC/OD in SB accounts.

 Capacity building through RSETI

 Financial literacy and credit counseling (ABHAY)

QUALITATIVE ASPECTS OF FINANCIAL INCLUSION PLAN:

42
i. Technological Status:
All the BOI branches across the country are in CBS. Bank has 5 RRBs sponsored by it.
All these RRBs are also going to be on CBS system by September 2011.

ii. Road map for provision of banking facilities –bank envisages to provide banking
services to all villages within its command area by the year March, 2013.

• Services will be provided through our branches and business correspondents to be

engaged for the purpose as per RBI guidelines.

• Out of 28,929 service area villages, both in lead and non-lead districts across the
country, it is being proposed to extend banking services in 6,936 villages by
March,2011 where the population exceeds 2000 per village.

• It will be rolled out to additional 11,023 villages by March,2012 and finally to

remaining 10,970 service area villages by March, 2013.

• Facilities will be provided through our existing rural/semi urban branch network
of 1268 rural and 647 semi urban branches across the country and also
engagement of Business Correspondent sub agents.

i. Information and Communication Technology (ICT) based solution-

Bank has already implemented ICT based financial inclusion solution to offer basic
banking services at doorsteps of villagers at selected villages attached to the bank’s few
identified rural/semi urban branches using biometric smart cards based solution utilizing
the service of field BC.

ii. Extensive outreach through BC model-

• Bank proposes to engage the services of approximately 15,000 BCs/BFs/sub
agents for the purpose
• Already engaged the services of 530 BCs/BFs in different geographical locations.
• BCs will be imparted elementary training of banking operations by the bank.
Their banking skills will be upgraded/reoriented through capsule
programmes/workshops etc. apart from financial products knowledge.

43
 • A detail “Policy on engagement of Business Correspondents” is envisaged for the
purpose.

i. Process of vendor selection

• Bank to come out with a fresh RFP (request for proposal) for end to end solution
for financial inclusion project shortly on its website.
• Bank is looking for engaging multiple vendors for multiple locations with
multiple technological solutions compatible to our core banking operations. The
process is yet to be finalized.
• Bank envisages to conclude awarding of contract to the vendors by end of May,
2010.

i. Credit Linkage-
• Bank has factored an initial overdraft of Rs 500 in each no frill account as an
inbuilt facility.
• Beside this, bank has also considered GCC/KCC facility to the beneficiaries with
an average ticket size of Rs 15,000 per account based on number of households.

i. Review and Monitoring mechanism:

• Zonal manager will be the chief monitoring authority for the progress of the plan
in the zone.
• He will be supported by a team of 1 senior officer of minimum to be designated
as Chief Manager (Rural Development) SM IV ( a vertical in Zonal offices who
will be nodal officer for financial inclusion project for the zone), adequate
number of field officers (1 field officer for a cluster of 5 branches) dedicated for
the credit linkages under financial inclusion project and “channel management
partners” (1 CMP for a cluster of 20 BCs/BFs/sub agents) on contract basis.
• The CMPs so envisaged will be retired senior officers from the banking system
and will coordinate, advice and assist bank’s officials and work as intermediaries
between bank and BCs/BFs/sub agents.
• Proper MIS developed to capture data in respect of number and names of
villages covered, number of beneficiaries provided with smartcards/biometric
access/ mobile phones, number of persons receiving government payments
through EBT, level of credit dispension, recovery, transactions, savings etc. on
periodical basis.

44
 MIS will be used for effective monitoring, undertaking midterm correction, if
required, for achievement of planned target.

Distinctive feature of MIS in FIP is that it will be upstream where required

reports will be generated at the level of monitoring and controlling authorities.

i. Integration of FIP with the business plan:

• Against an expected outstanding level of Rs 14,000 crores as on 31/03/2010 in

respect of direct agriculture finance, minimum 25% growth is desired by the
Bank.

• With the integration of FI business plan, Bank is confident of enhancing its

business size commensurate to its corporate business plan with a thrust on
inclusive growth.

i. Urban Financial Inclusion-

• A good number of people residing in urban/metros engaged in labour intensive

job are also excluded from mainstream banking services. In order to bring them
into banking fold, BOI has started a project called “Urban FI” in Mumbai
through 2 branches in Mumbai (N) and Raigad Thane Zones.

• Migrant labourers and self employed persons remit money to their family
members and depend on the informal sector for the service.

• Bank has started a mobile remittance facility for this segment at Mumbai with
the help of technology provider Mchek. This facility will be implemented across
the country shortly.

i. Leveraging on Unique Identity Project initiatives-

Technological solution has been so designed that FI efforts is suitably leveraged on
unique identity solution being proposed by UIDAI (Unique Identity Authority of India).

45
QUANTITATIVE ASPECTS OF FIP

Serial Particulars
number
i. No. of rural branches 1268
ii. No. of semi urban branches 647
iii. No. of service area villages 28929
iv. No. of service area villages with population more than 2000 to be 6936
covered in year 2010-2011
v. No. of service area villages to be covered in year 2011-12 11023
vi. No. of service area villages to be covered in year 2012-13 10970
vii. No. of persons eligible under FIP in our service area villages 92.43 lac
viii. No. of persons proposed to be covered under urban FIP 7.47 lac
ix. Total no. of persons proposed to be covered under bank’s FIP 100 lac
x. Out of (ix), account already opened 27.14 lac
xi. Accounts yet to be opened in next 3 years 72.86 lac
xii. Biometric cards to be opened in next 3 years- including issuance of 97 lacs
cards in existing accounts
xiii. Total credit outlay proposed under FIP in next 3 years 11,480 crores
xiv. Total deposits expected to be mobilized in next 3 years in proposed 728.62 crores
accounts

46
 xv. Total no. of BCs/BFs/sub agents to be appointed 15,000
xvi. Total no. of CMPs to be appointed 750
xvii Coverage proposed in 1st year (for account opening & issuance of 60 lacs
. biometric cards)
xvii Coverage proposed in 2nd year (for account opening & issuance of 20 lacs
i. biometric cards)
xix. Coverage proposed in 3rd year (for account opening & issuance of 20 lacs
biometric cards)
xx. Credit linkage proposed in 1st year (amount) 3300 crores
xxi. Credit linkage in 2nd year (amount) 3900 crores
xxii Credit linkage proposed in 3rd year 4280 crores
.

**above figures arrived after taking into account cumulative data of service area villages, their
households and adult population from all the rural and semi urban branches of BOI.

ASSUMPTIONS:

While arriving at the figures, following assumptions were made which are based on relevant
empirical data collected from the branches and other sources like census data, statistics available
on RBI website etc.

Various assumptions are enlisted below:

• Over the years, various financial intermediaries viz. credit cooperative societies,
cooperative banks, land mortgage banks, PACs etc. have extended credit facilities to
farmers even in the service area of BOI.
• In built overdraft facility is proposed at the rate of Rs 500 in all the accounts.
• GCC/KCC/BKC is proposed at the rate of Rs 15,000 to be given to all the households.
• Incidence of NPA is taken at the rate of 5% against an average NPA of less than 3% in
AFD accounts.
• Expected average deposit generation per account is taken at Rs 1,000

47
 • Micro insurance projections are based on group life insurance. This cover is available to
all agricultural borrowers with credit limit up to Rs 50,000.
• Total expenses involved towards cost of cards is taken at Rs 80. Business correspondent
(BC) charges at 1.75% of turnover as per IBA working group report.
• Appointment of BCs, monitoring of business through BCs and evaluation of the project is
proposed throughout creation of fresh vertical of Channel Management Partners-
proposed to be outsourced on contract basis at the rate of one CMP per 20 BCs.
• Average Government deposits under various development projects will be available at
least in 48 lead districts at the rate of Rs 50 crores per district- leading to a float of 2400
crores-on average basis.

Bank plans to roll out the financial plan across the country as under-

Over 2000 and 2000 and 2000 and Total

2000 by below by below in below in
March March Financial financial
2011 2011 year 2011- year 2012-
2012 2013

48
i. No. of villages to be
provided with banking
services

a)through branches

b)through BCs 1251 - - - 1251

5685 400 11023 10570 27678

ii. No. of households to be 1825318 82150 2216336 2088686 6212490

covered
iii. No. of BCs to be 5685 175 4666 4474 15000
appointed
iv. No frill accounts to be 6000000 125000 2000000 2000000 1000000
opened along with 0
overdraft
v. Households to be 1825318 82150 2216336 2088686 6212490
provided with KCC/GCC
vi. Other financial products
to be introduced and
targets thereof business
generation:

a. Deposits
b. Advances
30000 1425 20000 21375 72800

300298 410 380402 418091 1099201

Strategies:

49
Action plan to achieve the target (business volume) and support requirement involve-

• Engaging of technology vendors based on the premise that there will be multiple vendors
for providing cost effective services at segmented locations across the country.
• Opening of branches-presently 1915 rural and semi urban branches of BOI. Bank plans to
add 500 such branches in next 3 years as under-
2010-2011:200
2011-2012: 200
2012-2013: 100
• Engaging 750 CMPs as an intermediary between bank and the BCs/BFs/sub agents with
distinct job profile to coordinate, assist and advice bank’s officials in drawing and
allocating business plans for BCs.
While allowing CMPs for assisting in processing the credit proposals, steps be taken for
avoiding any conflict of interest.
• Engaging 5,000 BCs/BFs/sub agents and train them ab initio to become an effective
delivery channel at the doorsteps of the customers.
• Recruiting 500 field officers to be posted at rural/semi urban branches to assist them in
processing GCC/KCC/Loan applications of financially excluded households.
• Branches to sanction and disburse all eligible loan applications within a maximum period
of 15days from the date of receipt of application.
• Assigning a dedicated position of Chief manager SM IV (Rural Development) to be
created as a separate vertical at all 45 zones having rural and semi urban branches. He
will coordinate the activities of branches/field officers and BCs/BFs/sub agents with the
help of CMPs.

Chief Manager RD will be a “one point contact” for the FIP and will report to zonal
manager of zone and Head office, Priority sector development (Rural Development Cell).
• Opening of no frill account with an inbuilt overdraft facility of Rs 500 ab initio.
• Providing GCC/KCC/BKC to all eligible households with an average ticket size of Rs
15,000 per household.
• Covering all no frill account with Group Life insurance of Rs 25,000 each.
• Financing through JLGs/SHGs with a focus on women beneficiaries to inculcate
improved repayment ethics
• Mobilizing savings of rural households as with growth in income levels, the level of
savings is also expected to increase. BOI has projected a savings of Rs 1000 per borrower
per annum.
• Availing the opportunity of good FLOAT FUND in respect of Government payments viz.
NREGA wages, social security, SC/ST scholarship etc. It is expected that a good FLOAT
FUND will be available to the bank.

50
 • Business opportunities available in the plan be captured for the expansion of banks
business
• Providing impetus to the savings potentials as it is expected that with enhanced
infrastructure investments and the demographic profile of the country, there will be
increased labour force in the age segment of 15-65 years
• Operationalisation of “MOBILE REMITTANCE” facility. Migrant labours remit money
to their inmates in villages. We are confident that it will penetrate into this segment and
capture sizeable portion of remittances through advent of mobile technology. This will
lead to twofold increase in banks business- savings deposits at one end and fee based
income on the other.
• KYC norms AML measures and all other statutory obligation are strictly complied in the
implementation of the plan.
• Rigorous audit be put in place in the implementation of the plan to ensure accuracy of the
transactions.
• Committee of GM’s at head office will be constituted to study the audit and control
measures in the implementations of the plan.
• Bank will explore covering 400 villages with population of 2000 and below also during
the period 2010-11
• It will be ensured that the services to the customers under the plan be made available
regularly.
• A review note on the implementation of the plan will be submitted to the board after six
months.

ACTION PLAN- STEPS 1 TO 9

The various steps to be taken up for ensuring 100% Financial Inclusion are enumerated below in
the proper sequences for easy understanding of all concerned:

Step 1:

One officer in the Zonal office should be designated as “Nodal Officer” to coordinate with our
Bank branches, NABARD, district coordinators of other banks including RRBs, Cooperative
Institutions, Government Offices, NGOs etc. The Officer should always be in a position to
furnish up-to-date position of financial inclusion in the district.

Step 2:

The zonal manager should issue a DO letter to the branches in the zone about ‘Financial
Inclusion’ campaign/ implementation. ZO should also ensure that branches have adequate

51
stationery such as SB A/c, opening forms, loan application forms, documents for sanctioning
general credit card etc.

Step 3:

Branches should furnish a list of villages/ maintain village wise register of villages allotted to
them for financial inclusion. The basic statistics on each and every allotted village should also be
furnished to the zonal office.

Step 4:

Wherever required, branches may engage a private photographer for obtaining the passport size
photographs of customers, as obtaining photographs is a mandatory requirement at the time of
opening SB account, including V- Saral account. The photographer may have to accompany the
branch team to the villages for taking photographs.

Step 5:

Keeping in mind the local situation and the time frame for 100% coverage of households in
allotted villages under Financial Inclusion, branches should formulate and finalize their own
strategies. However, while finalizing the strategies the following points may be considered:

• Villages which are considered to be highly responsive should be selected first for the
purpose of the survey.
• The dates and time of visits to the villages should be decided in advance. A team
consisting of staff members should be selected for this purpose.
• It should be kept in mind that the time of visit to the villages should be convenient to the
villagers/ households.
• The dates and time of visit of the survey team to the villages should be announced in
advance and the purpose of the visit of the survey team should be made known to the
villagers. The assistance of GP members/ local leaders/ village youth may be sought for
this purpose.

52
• The survey team should visit all the houses and all the streets in each village in a
chronological order so as to ensure 100% coverage of households for the survey.
• While opening SB accounts, branches should comply the applicable KYC norms. Proper
introduction from the already existing customer who had complied with KYC norms
and/or from local revenue official to be obtained.
• To begin with, branch shall ensure opening of at least one account by each household.
Opening of more than one account from each household may be encouraged.
• At the time of opening of SB account itself, the family survey report on the potential of
each family has to be collected.
• Branch staff shall ensure that the required information is fully collected, the prescribed
forms are properly filled in, the signature/ thumb impression is got affixed at all the
required places; nomination is registered and then only passed for opening of SB
accounts.
• Branch shall ensure that accounts are opened promptly. The branch manager has to
personally ensure that the account opening is properly authorized and the photographs
are affixed in the account opening forms, specimen signature cards, etc.
• The branch shall ensure and confirm that all the eligible households in a village are
covered under Financial Inclusion and their accounts are opened.

Step 6:

At the end of each day of the survey, the survey team should prepare a statement as per
annexure- II and submit the same to the branch manager. The branch should submit Weekly
Report as at the end of each Friday, as per Annexure-II to the regional office.

Step 7:

ZOs should provide necessary assistance and support to rural/ semi urban branches for
timely completion of this exercise. In case of requirements, services of staff members of RO
and/ or nearby urban branches may be utilized. The RO shall get information from each
branch over phone on a daily basis, regarding the process so that the required support and
encouraged can be ensured.

Step 8:

The ZOs to submit weekly report as at every Friday, to reach Credit Department (Priority),
Head Office by the succeeding Saturday/ Monday. The format is furnished at Annexure- IV.

Step 9:

The business model developed for the household should be implemented in a time bound
manner.

53
MANPOWER PLANNING-

It is proposed to engage business correspondents/ business facilitators/ sub agents while

executing the plan as per RBI guidelines.

Channel Management Partners are proposed to be appointed on contract basis as a vital link
between bank and BCs/ BFs/ sub agents.

A. Recruitment of BCs/ BFs/ Sub agents-

• Data collection of beneficiaries, their enrolment, account opening, and biometric
card issuance requires skills at lower end and cost considerations do not permit to
engage Bank’s own staff for these.
• It is proposed to appoint approximately 15,000 business correspondents across the
country.
• These persons will be sourced locally so that their knowledge of local language
and culture can be put to best use.
• BCs/ BFs/ sub agents will be working as an extended arm of the technology
providers in the implementation of the project.
• Selection of BCs will ultimately be approved by Bank through a committee at
zonal level.

Salient features of the Business Correspondent Model envisaged are indicated below:

 Eligibility/ scope/ Extent of activities:

Eligibility:
• NGOs/ MFIs set up Societies/ Trust Acts, Societies registered under Mutually
Aided Cooperative Societies Acts or the Cooperative Societies Acts of states.
• Section 25 companies, registered NBFCs not accepting public deposits.
• Post offices
• Reputed Farmer’s Clubs.

Scope:

The primary activities to be undertaken by the BCs will include:

• Disbursal of small value credit

• Recovery of principal/ collection of interest
• Collection of small value deposits

54
 • Sale of micro insurance/ mutual fund products/ pension products/ other third party
products and
• Receipt and delivery of small value remittances/ other payment instruments
• Any other service on behalf of the bank, duly authorized by the appropriate
authority.

Further, the activities carried out by the business facilitators will also be additionally undertaken
by the Business correspondents as under:

• Identification of borrower
• Collection and preliminary processing of loan applications including verification of
primary information/ data
• Creating awareness about savings and other products and education and advice on
managing money and debt counseling
• Processing and submission of applications to branches
• Promotion and nurturing Self Help Groups/ joint Liability groups
• Post sanction monitoring
• Monitoring and handholding of self help groups/ joint liability groups/ credit groups/
others and
• Follow-up for recovery

The Business Correspondents will be undertaking activities within the normal course of the
bank’s banking business, but conducted through the entities indicated above at places other
than the bank premises.

Role of Business correspondents:

These functions are essentially in the nature of agents of the bank, (an extended arm of the bank)
and may include the following-

• Authentication of the application for enrollment brought in by the facilitators

• Verification of primary information/ data
• Creating awareness about savings and other products, education and advice or managing
money and debt counseling, marketing of the financial products including savings/
providing product information etc.
• Disbursal of small value credit
• Recovery of principal and collection of interest
• Collection of small value deposits

55
 • Sale of micro insurance/ mutual fund products/ pension products/ other third party
products.

A. Channel Management Partners-

• To monitor the functioning of BCs and BFs, CMPs will be engaged who will be
reporting directly to the nodal officer at zonal level.
• 1 CMP for a cluster of average 20 BCs is envisaged.
• Retired bank officials will be engaged as CMPs.

A. New recruitment-
• Bank proposes to recruit 500 officers with aptitude in areas like Agricultural
extension, rural development, and social work and community service.
• These officers will be coordinating field level efforts of business correspondents
for entire gamut of activities (from account opening to credit linkage and credit
monitoring).

Meticulous planning and its time bound execution is expected to be the differentiated to place
BOI ahead of other players in this niche.

This will require engagement of 15,000 BCs, appointment of 750 CMPs, recruitment of
additional 500 officers with aptitude to work in rural areas, 50 Chief Managers at Zonal offices
and Head office, one AGM and one DGM.

FINANCIAL LITERACY & CREDIT COUNSELLING-

i. Establishment of RSETIs-
• Bank is aware that financial markets offer a variety of both simple and
complex financial products.
• It is difficult for the common person to grasp the downside risks associated
with financial products especially if he/she is confronted by clever
advertising.
• Financial education is thus primarily on the individual, who usually has
limited resources and skills to appreciate the complexities of financial
dealings with financial intermediaries on matters relating to personal finances
on a day to day basis.
• In terms of GOI, MORD guidelines, Public sector Banks are expected to
establish RSETIs in districts where it has lead bank responsibility.

56
 • Government guidelines also permit establishment of need based RSETIs at
places where banks do not have lead bank responsibility with concurrence of
the state governments.
• Bank has lead bank responsibilities in 48 districts spread over in 19 zones and
5 states.
• Bank has already established 12 such institutes so far, and going to establish
20 institutes by 31st March 2010 for which necessary formalities are in
different stages.
• Rest RSETIs will be established in next 2 years.
• RSETIs are organizing vocational training programme for unemployed
persons in villages with special emphasis on BPL families, women and
members of SC/ST.
• Emphasis will be given for credit linkage to the trained persons for
establishing/expanding their venture.

i. Integrated Centre of Development:

• Banks plan to upgrade the RSETIs to become a hub for integrated centre of
development by extending its scope to primary healthcare, adult literacy,
comprehensive financial access and planning for growth, strengthening civil
society organization, environmental sustainability etc.

i. Collaborators:
• For primary health services, BOI would like to collaborate with local
government doctors, red cross society, lions and rotary clubs and also private
medical practitioners to provide medical checkup and offer services to the
local populace on daily/tri weekly basis at these centres.
• For adult literacy programmes, BOI would collaborate with the local adult
education department of the state governments and also the services of retired
teachers will be taken to impart basic education to the deprived section at the
centre.
• Towards access to financial services, BOI would like to rope in the services
of KVIC, NABARD, DRDA, local PACs, BCs/BFs, insurance companies and
also BOI’s own outlets so that needy people are connected appropriately
which will not only end up to their exploitations but will also generate their
livelihood.
• Towards creation of strong civil society, BOI would like to strengthen the
bondage with the local Panchayati Raj Sansthan at village, Panchayat, block

57
 and district level along with the Government functionaries and NGOs
working in the area having good credential.
• Towards environmental sustainability, BOI would like to develop bondage
with Horticulture Board, Government irrigation/forestry/rural development
departments, project specific corporation/board created for environment
protection, local agriculture universities/colleges, operating NGOs with good
credentials, farmers’ clubs.

All out campaign for smokeless chulhas, clean drinking water for rural households, improvement
of hygiene through hand washing, provision of hygienic toilets, lighting through solar energy etc.
is proposed with the help of various agencies involved.

i. Credit Counseling Centers-

• BOI played captain’s role in opening Credit Counseling Centers manned
by senior/ experienced bankers.
• Counselors aim at exploring the possibility of repaying debts outside
bankruptcy for users and educate them about credit, budgeting and
financial management.
• Examine the ways to solve current financial problems of the users,
educating them about the costs of misusing a credit and improve financial
management besides encouraging distressed people to access the formal
financial system.
• Apart from curative counseling on case to case basis for the distressed
borrowers, Preventive counseling can be through the media, workshops
and seminars as well.

OTHER RELATED ISSUES-

I. Money Lender’s free village-

All branches to free at least 5 villages in their command areas to make these villages
free from the debt trap of money lenders.

II. Product innovation-

• Bank has a full suit of products suitable for the excluded segment both in
terms of deposits and credit as well.

58
 • Presently BOI does not propose introduction of any new products. However,
need based fine tuning of the products will be done from time to time.

I. Village adoption scheme-

• BOI proposes to adopt 525 villages in 3 years span starting from the Financial
Year 2010-2011 for its integrated development as a part of bank’s
commitment towards socio-economic development.
• BOI has started adoption of villages under its centenary celebration
programme to give further impetus to village adoption scheme and make this
as an integral part of FIP.

• Village adoption scheme supposed to be implemented as under-

Year No. of villages to be adopted Distribution of villages

2010-11 150 i. 2 villages each lead
districts for zones
having lead district
responsibilities (19
zones).
ii. 2 villages each by
zones that do not
have lead district
responsibilities (26
zones).
2011-12 150(new) i. 2 villages each lead
districts for zones
having lead district
responsibilities (19
zones).
ii. 2 villages each by
zones that do not
have lead district
responsibilities (26
zones).

59
 2012-13 225 (new) i. 3 villages each by
zones having lead
ii. 3 villages each by
zones that do not
have lead district
responsibilities.(26
zones)

I. Incentives/ disincentives to human resources:

• BOI contemplates to start cash incentives to the performing staffs.
• BOI also proposes inclusion of “Performance in Financial Inclusion” as a non
financial KRA in the annual performance appraisal of officers/branch heads
and zonal heads with appropriate weightage.

i. Seminar/workshops-
• Holistic approach of the ground level functionaries is required for the success
of this project.
• Accordingly, conferences, seminars, workshops are proposed preferably at the
work place locations for sensitization of different level functionaries.

Implementation of Financial Inclusion by Bank of India with respect to its

existing policy:

Bank of India has planned for a large size business model under FIP backed with a deep
conviction that poor is bankable with good business prospects. Its various FI initiatives are
expected to further strengthen its financial deepening and provide resources to expand delivery.
With evolution of banking technology, the transaction costs are also expected to be reduced.

Bank of India has devised strategies for effective implementation of FIP 2010-2013. As given in
its existing policies for financial inclusion, opening of no frill accounts has been given the top
priority in the initiatives taken by Bank of India.

60
1. Organizational structure for implementation of Financial Inclusion Project:

Bank of India has devised an organisational structure for effective implementation of the FIP
2010-2013.

• At the top, there is General manager at Head Office, Priority Sector Department.
• The Priority Sector Department consists of a Rural Development Cell at the head Office.
which deals with the diverse aspects of FIP 2010-2013 viz.

➢ Financial inclusion Plan: Account opening, issuance of biometric smartcards,

implementation of ICT based, FI solution from approved technological service
providers.
➢ Integrated Development Project for RSETIs: Credit Linking to No frill accounts,
smart cards opened.
➢ Financial Literacy:
➢ MIS reports:

• The Zonal Managers at the Zonal Head Quarters are informed about the strategies and
plans devised by Priority sector Department at the Head Office.
• Zonal managers pass on the information further to the Nodal Officers (Scale: SM IV) who
passes on the information to
 Field officers at Branches/Fields
 Branch managers
 Lead District managers at BOI’s lead districts
 Channel Management partners

for the actual implementation of the Financial Inclusion Solution Project.

1. Observing May 2010 as “FINANCIAL INCLUSION MONTH” by all rural and semi
urban branches of BOI for credit delivery and recovery drive.

• Bank of India’s FIP 2010-2013 envisages opening of 1 crore no frill accounts with
credit linkage to 66 lakh households in about 33,000 villages across the country with
a projected credit outlay of Rs 11,480 crore.

61
• Implementation of the plan has already begun and at the first step, branches are
required to cover minimum 10% of the villagers with population more than 2000 by
the end of June 2010.
• Accordingly, the branches are advised to implement the following action plan as
under-

➢ Adequate publicity to be made in the command area villagesby holding regular

meetings, mass contact campaigns, credit camps at the village level by inviting
functionaries from Zonal office, Local MLA, BDO, SDO, District collector and
involving SHGs/farmers club.
➢ All rural/semi urban branches to organize minimum 7 credit camps during the
Financial Inclusion Month.
➢ Under FIP, each and every household are to be provided credit linkage viz.
GCC, KCC and overdraft in SB accounts in a time bound manner and minimum
10% of households are to be covered by end June 2010 in villages with
population more than 2000 alloted to BOI.
➢ This would help the branches to meet all the existing borrowers and ascertain
their credit needs and sanction fresh/additional limits as well as for new
customer acquisition.
➢ Branches are advised to open as many accounts as possible everyday with token
disbursement from amongst the sanction accorded in respect of the applications
collected in the credit camps.
➢ Branches are also advised to take a note to market and popularize BOI’s other
microfinance products-solar energy home lightening system, educational loans,
rural housing loans, gold loans, loans under debt swap scheme, DRI, finance to
minorities as well as lending to small farmers/ marginal farmers/tenant
farmers/share croppers/farmer’s clubs/JLG etc. in increasing number of
accounts as well as achieving the purpose of Financial Inclusion.
• Recovery Drive:
➢ As the time coincides with the harvesting season, this would enable the
branches to effect recovery and obtain renewal documents.
➢ Branches have already been advised to make rigorous efforts for recovery in
respect of farmers eligible under Debt Relief where last date of time for
repayment has been extended upto 30th June 2010.
➢ Therefore, all the efforts are to be made to recover the dues even by offering
compromise settlement for farmers facing genuine financial difficulties.
➢ During this campaign, branches to ensure that all farmers benefitted under
Agricultural Debt waiver and debt relief scheme are extended fresh credit
facility as advised earlier.

62
1. Financial Inclusion solution Project:
➢ M/s “i-25 Rural Mobile Commerce Services”- a not for profit organisation under
section-25 companies promoted by 3 reputed NGOs, viz. M/s ADATS, M/s
FAER, M/s Sunrise imaging india Pvt. Limited with M/s Integra Microsystems
Pvt Ltd., bank’s approved technical service provider, has been engaged as the
Business Correspondent to appoint their local BCs sub agents at the grass root
level to render the services of BCs/ BC sub agents at the service areas of
concerned branches under Varanasi zone in the IT enabled Financial Inclusion
solution Project irrespective of the rural, semi urban and urban areas under the
varanasi Zone.

1. Adoption of Villages:
➢ Bank of India BOI has started adoption of villages under its centenary celebration
programme to give further impetus to village adoption scheme and make this as
an integral part of FIP.

1. Credit Counseling Centres:

➢ Bank of India has opened 4 credit counseling Centres named “ABHAY” and also
proposes to open 7 more such centres across the country by March 2013.
➢ The 4 centres have been opened at Mumbai, Chennai, Wardha and Gumla.
➢ All the 4 centres have so far handled more than 3500 cases.
➢ These centres have also organized seminars to educate people in respect of
financial planning and judicious use of credit.

63
Data Analysis: Findings and Interpretation
1. Rural and semi urban branches of BOI under Varanasi Zone:
There are 15 rural and semi urban branches of Bank of India under Varanasi Zone. 7 are rural
branches and 8 are semi urban branches.

Among the rural branches: Jamui, Tela, Sukaha, Lattudih, Phoolpur, Musafirkhana, Kauhar

Among the semi urban branches: Robertsganj, Jhusi, Pratapgarh, Azamgarh, Bhadohi,
Nayabazar, Mughalsarai, Balrampur

Sl. No. Branch Number of Villages covered by

the branch
1. Jamui 11
2. Robertsganj 2
3. Tela 5

64
 4. Jhusi 1
5. Pratapgarh 2
6. Azamgarh 2
7. Sukaha 7
8. Lattudih 5
9. Bhadohi 2
10. Nayabazar 1
11. Mughalsarai 3
12. Phoolpur 11
13. Balrampur 5
14. Musafirkhana 9
15. Kauhar 10

1. Bank of India, Phoolpur Branch:

District: Varanasi
Category: Small
Date of opening: 21.01.2008

65
 No. of villages adopted by the branch in September 2009: 11
Name of the Villages: Khalispur, Mani, Vikrampur, Devji, Katawna, Bharauna, Parsara,
Gauria, Hiramanpur, Nadoi and Gajokhar.

2. Total no. of villages serviced by Rural and semi urban branches of BOI,
Under Varanasi Zone: 76
Villages serviced by BOI, Phulpur: 11

3. No. of villages serviced by rural branches of BOI under Varanasi Zone: 58

No. of villages serviced by BOI, Phulpur: 11

4. Number of No frill accounts to be opened during FIP 2010-2013 in Varanasi Zone:

No frill accounts
already opened 6445
to be opened in 2010-13 57870

5. Under the Financial Inclusion Plan 2010-2013:

No. of biometric cards to be issued in FIP 2010-2013: 60480

66
 No. of biometric cards to be issued in 2010-2011: 36288
No. of biometric cards to be issued in 2011-2012: 12096
No. of biometric cards to be issued in 2010-2013: 12096

6. In Financial inclusion Month, May 2010:

No. of beneficiaries contacted in Varanasi Zone: 11380
No. of No frills accounts opened in Varanasi zone: 4315

7. May 2010
celebrated as no frill accounts opened
Financial Inclusion
Month by BOI, in rest of varanasi zone 4174
Varanasi Zone.
in phulpur branch 141

Total of no frill accounts in Varanasi 4315

Zone

8. In May 2010, no frill account opened under Scheme code SB-105 in semi urban and rural
branches of Varanasi zone:

SL .No. Branch SB- 105 Total amount

deposited (in lacs)
1. Jamui 0 0

67
 2. Robersganj 01 0.001
3. Tela 775 0.18
4. Jhusi 32 5.97
5. Pratapgarh 47 0.15
6. Azamgarh 44 0.01
7. Sukaha 55 0.13
8. Lattudih 859 0.07
9. Bhadohi 43 0.04
10. Nayabazar 62 0
11. Mughalsarai 48 4.09
12. Phoolpur 141 0.60
13. Balrampur 13 1.03
14. Musafirkhana 76 0
15. Kauhar 164 0.02
TOTAL 2360

9. No Frill accounts opened under Scheme code SB- 104 in Semi Urban and Rural branches of
Varanasi Zone during May 2010:

SL. No Branch SB- 104 Total Amount

deposited (in lacs)
1. Jamui 74 3.50
2. Sukaha 1253 0
3. Lattudih 520 0.15
4. Musafirkhana 53 0
TOTAL 1900

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 **Total accounts opened under SB-105 are 2360. Total accounts opened under SB-104 are
1900. Thus, 55 no frill accounts have been opened in urban branches.

10.In May 2010, KCC account opened in Rural and semi branches under Varanasi Zone:

BRANCH KCC A/C opened Amount sanctioned( in lacs)

Jamui 03 3.81
Robersganj 02 1.10
Tela 06 1.34
Jhusi 0 0
Pratapgarh 0 0
Azamgarh 0 0
Sukaha 09 8.24
Lattudih 05 2.56
Bhadohi 0 0
Nayabazar 03 1.10
Mughalsarai 0 0
Phoolpur 01 0.12
Balrampur 08 3.42
Musafirkhana 03 0.76
Kauhar 05 2.13
TOTAL 45 24.58

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11.Distribution of KCC/GCC during Financial Inclusion month in Varanasi Zone:

In May 2010,for (figures in lacs)

KCC/GCC
limit of amount 30.5
sanctioned
disbursement made 15.5

** limit of amount sanctioned : 24.58 lacs for SU & R branches plus 5.92 lacs for urban
branches

12.Awareness among the people in Phulpur region about the 7 credit camps organized during
Financial inclusion Month May 2010 on 06.05.2010, 10.05.2010, 14.05.2010, 17.05.2010,
21.05.2010, 24.05.2010 and 28.05.2010:

70
13.In a No frill account, the minimum balance to be kept in the account in rural and semi urban
branches is Rs 50. Initial amount deposited while opening a no frill account in Bank of India,
Phulpur:
Accounts opened with Rs 50 or less: 29%
Accounts opened with more than Rs 50: 71%

14.Occupation of the beneficiaries/ no frill account holders contacted in BOI, Phulpur:

71
FINDINGS:
1. No. of no frill accounts already opened in Varanasi zone: 6445
Total no. of no frill accounts opened in Varanasi Zone during May 2010: 4315
No. of no frill accounts projected to be opened in FIP 2010-2013: 57870
In May 2010, only 7.4% of the target aimed for the year regarding the no frill account, has
been achieved by BOI, Varanasi zone.

2. BOI Phulpur has performed poorly in terms of opening of no frill accounts.

No. of no frill accounts opened in BOI, Phulpur during May, 2010: 141
No frill accounts opened in total Varanasi Zone: 4315

No frill accounts opened by Phulpur branch is only 3.2% of the target achieved by BOI,
Varanasi Zone, during May 2010.

Among rural branches,

BOI, Phulpur has opened 141 no frill accounts among 3970 no frill accounts opened by total
no. of rural branches. Thus, BOI, Phulpur contributed just 3.5% to the target achieved by the
rural branches.

3. BOI, Lattudih provides services to only 5 villages under Varanasi zone but it has been able to
open 1379 no frill accounts (highest among the rural branches) in may 2010.

72
 Whereas,
BOI, Phulpur services to 11 villages under Varanasi zone but it has been able to open only
141 no frill accounts in May 2010.

4. Ranking of the rural branches in terms of no. of no frill accounts opened during May 2010:

RANK BRANCH No. of no frill accounts

opened
1 Lattudih 1379
2 Sukaha 1308
3 Tela 775
4 Kauhar 164
5 Phoolpur 141
6 Musafirkhana 129
7 Jamui 74

Thus, BOI, Phoolpur stands 5th among the rural branches of BOI in Varanasi Zone, faring
poorly in terms of no. of villages it serves and no. of no frill accounts it has been able to open
in May 2010.

5. In May 2010, total no. of KCC/GCC opened in Varanasi Zone: 57

Total no. of KCC/GCC accounts opened by rural branches: 32

73
 Ranking of rural branches in terms of no. of KCC/GCC opened in May 2010:

RANK BRANCH No. of KCC/GCC accounts

opened
1 Sukaha 09
2 Tela 06
3 Lattudih, Kauhar 05,05
4 Jamui, Musafirkhana 03,03
5 Phoolpur 01

In terms of opening of KCC/GCC accounts, BOI Phulpur fares very badly holding the last
position among the rural branches. BOI Sukaha leads the list with 9 accounts.

6. Households depending on remittances and NREGA workers are the main benefittors from
the financial inclusion drive. These people operate their accounts for the maximum number
of times.

7. The awareness regarding the credit camps organized by BOI Phulpur, was low. Only 35% of
the population at Phulpur was aware about the credit camps organized during the financial
inclusion month 2010.

8. The distance of the villages from BOI Phulpur, along with the hot and humid conditions
during the financial inclusion drive led to low turnout in the credit camps.

9. Some of the no frill accounts opened during the financial inclusion drive remained
inoperative later due to lack of interest shown by the customers.

10. Because of the delay shown by top management, Biometric cards have not been issued
during the financial inclusion drive though the target for 2010-11 is 36288.

11. Shortage of bank staffs at BOI, Phulpur created chaotic situations at the credit camps during
Financial Inclusion drive.

74
 SUGGESTIONS:

1. Observing more weeks/ months as Financial Inclusion week/month to stress on the

different aspects of FIP 2010-2013

It has been a laudable effort by BOI, Varanasi Zone to observe May 2010 as the Financial
Inclusion Month to give an impetus to the FIP 2010-2013 and open a good number of no frill
accounts and provide KCC/ GCC to the beneficiaries. But the targets would be more
effectively achieved if more such months/ weeks are observed.

2. Organising Credit Counseling camps

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 Just like credit camps that were organized during FI month, May 2010; credit counseling
camps may be organized to provide credit related advices to the rural/ semi urban branches.

3. Promoting the Credit cum counseling camps with proper promotional tools:

• Using banners provided by the Zonal Office, BOI and placing them at strategic points in
villages like near the village temple, near the market place etc.
• Using pamphlets for distribution so that the masses can know about the credit camps.
• Providing an advertisement in a local newspaper.
• Providing information through the local radio/ FM.

1. Staffs from Zonal Office may visit the rural branches periodically to provide credit
counseling to the account holders.

2. If possible, branch managers may organize credit camps at villages that are far away from the
branch as people from these villages usually do not visit the branch because of the distance.

3. Bank forms can be distributed to the villagers through the Gram Panchayats of the respective
villages. In this way, villagers will be saved from covering the far away distance just to get a
form for opening an account.

4. To prevent no frill accounts from becoming inoperative because of lack of interest shown by
customers, the branch may personally contact those customers.

5. The branch may take initiative in compiling the database of the households getting
remittances, thereby approaching all of them to open no frill accounts at the branch.

76
QUESTIONNAIRE:

As asked to the account holders of the branch:

1. Have you ever been provided with credit counseling by the officials at the branch?
• Yes
• No

1. How frequently you operate your account at the branch in a month?

77
 • 10 times in a month
• 5 times in a month
• Less than 5 times

1. What is the initial amount with which you are opening your account?
• Rs 50
• More than Rs 50

1. What is the main economic activity you are associated with?

• Farming/NREGA
• Aanganwadi
• Weaving/vendor etc.
• Others

1. How you come to know about the Credit camps organized by BOI?
• Word of mouth
• Through the Gram Panchayat
• Banners etc.
• Any other means

1. How many members of your family have got accounts in the bank?
• None
• More than 2
• Everyone

BIBLIOGRAPHY

1. Kothari, C.R.: Research Methodology: vikash publication, New Delhi.

2. Handbook of Bank of India

WEBSITE

1. www.bankofindia.org
2. www.nabard.org
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 3. www.rbi.org
4. www.google.co.in

JOURNALS
➢BOI’s Annual Report 2008-2009

➢BOI’s Annual Report 2007-2008

➢ BOI’s Annual Report 2006-2007

➢ BOI’s Annual Report2005-2006

MAGAZINES

1) Yojana
2) Kurukshetra

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