Research for final project

https://www.toppr.com/guides/economics/rural-development/credit-and-banking-in-rural-
areas/ - NABARD

https://www.financialexpress.com/economy/banking-revolution-has-left-rural-india-
behind/1247575/ - Banking Evolution

The ’80s saw an unplanned and indiscriminate expansion of bank

branches most of which later became an economic deadweight.
Between 1977 and 1990, the Reserve Bank of India mandated that a
commercial bank could open a new branch in a location that already
had bank branches, only if it opened four in locations with no
branches. This regulation was part of a social banking programme
that tried to expand access to financial services in rural areas. The
additional burden arising out of the mass opening of rural bank
branches adversely affected the resilience and viability of banks.

The lack of access to finance is often the critical mechanism behind

both persistent income inequality and slow economic growth. Hence,
financial sector reforms that promote broader access to financial
services should be at the core of the development agenda.

But an even more serious problem is the possible chilling effect of

subsidies on the commercial provision of competing and potentially
better services to the poor. Subsidising finance has severely
undermined the motivation and incentive for market-driven financial
firms to innovate and deliver.
https://www.deccanchronicle.com/nation/in-other-news/020418/the-major-challenges-for-
rural-banking.html

https://indianmoney.com/articles/nationalized-banks-in-india - Nationalised Banks in India

"For the incorporation, regulation and winding up of Regional Rural Banks with a view to
developing the rural economy by providing, for the purpose of development of agriculture, trade,
commerce, industry and other productive activities in the rural areas, credit and other facilities,
particularly to the small and marginal farmers, agricultural laborers, artisans and small
entrepreneurs, and for matters connected therewith and incidental thereto"

https://en.wikipedia.org/wiki/Regional_Rural_Bank
https://www.thehindubusinessline.com/opinion/columns/slate/all-you-wanted-to-know-
about-para/article9552123.ece - Para Banking

http://www.businessmanagementideas.com/banking/types-of-banks/regional-rural-banks-
rrbs-history-objectives-and-functions/5356 - More about RRB

https://economictimes.indiatimes.com/industry/banking/finance/banking/merger-of-
regional-rural-banks-within-same-state-likely/articleshow/68177145.cms - RRB

https://www.researchgate.net/publication/228265055_Efficacy_of_Regional_Rural_Banks_
RRBs_in_India_A_Conventional_Analysis - Efficiency of Regional rural bank in India

https://tarina.tci.cornell.edu/news-events/blog/what-are-the-obstacles-andopportunities-
in-rural-areas-to-achieving-a-cashless-india/ - Cashless economy in rural india
https://www.slideshare.net/debendraster/rural-banking - Rural Banking

https://www.cgap.org/blog/microfinance-india-growing-fast-again-should-we-be-concerned
- Micro financing

https://hbr.org/2016/10/making-microfinance-more-effective - Make micro financing more

effective ( Harvard Business Review)

https://www.ft.com/content/0b3dd4ce-8077-11e8-af48-190d103e32a4 - Indian
microfinancing gives birth to small banking model ( finish reading this )

1) BoP comprise the 1.05 billion people in India (5 out of 6 Indians) who

live on an annual household income of less than INR 200,000 as of
2005. This is equivalent to less than INR 16,667 monthly household
income. By 2015, size of the BoP is projected to be 997 million, still nearly
80% of the population. 

2) In urban India, where cost of living is higher, we consider BoP to have

an annual household income of less than INR 300,000. This is
equivalent to less than INR 25,000 monthly household income.
3) In rural India, we consider BoP to have an annual household income
of less than INR 160,000. This is equivalent to less than INR 13,333
monthly household income.

To more accurately reflect the urban-rural BoP divide, we define BoP

as less than 300,000 rupees per year for urban households and less
than INR 160,000 per year for rural households based on the
assumptions that urban households are 30.5% of the population and earn
91% more than rural households

https://www.unitus.vc/resources/defining-base-of-the-economic-pyramid-in-india/

Terminology & Assumptions

Rural India

National Sample Survey Organization (NSSO)a defines rural India as areas with (i) population
density of less than 400 per sq. km. (ii) 75 percent of the male working population engaged
in agriculture and (iii) no Municipal Corporation or Board. Other government agencies, such
as Insurance Regulatory and Development Agency (IRDA) and National Council for Applied
Economic Research (NCAER), define rural as villages with populations of less than 5000 and
75 percent of the male population engaged in agriculture.

Base of the Pyramid (BoP)

Here the rural Indian BoP market is defined as households in the bottom four expenditure
quintiles (based on data from the National Sample Survey Organization, India) that spend
less than Rs. 3,453 Indian rupees (US$75) on goods and services per month. This definition
represents a market of 114 million households, or 76 percent of the total rural population. b

Village Level entrepreneur (VLe)c

A VLE is often identified as a person who conducts business in a designated village/local area
to increase the reach and penetration of a certain set of products and services. VLEs
generate leads and make sales using their own social networks. Typically, VLEs earn
commission on every sale. A VLE’s role is important for sales, product promotion, product
selection, field-testing and trials. VLEs can act as important communication touch points
between producers/organized distributors and potential customers.
https://s3.amazonaws.com/academia.edu.documents/32945572/D0132529.pdf?
AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1555214785&Signature=HNU4yfDqs
3pma5Ek2T1HLQQR0IY%3D&response-content-disposition=inline%3B%20filename
%3DFinancial_Inclusion_and_Growth_of_Indian.pdf

Financial Inclusion and Growth of Indian Banking System

By Atul Raman

Financial inclusion refers to delivey banking services to masses including privileged and disadvantaged people
at an affordable terms and conditions. It not only enhances overall financial intensity of agriculture but also help
in increasing rural non farm activities which lead to development of rural economy and improve economic
condition of people. The three major aspects of financial inclusion are (i) access financial market (ii) access
credit market (iii) learn financial matters.

With special reference of some articles it is found that there are 403 million mobile users in India in which 54%
has bank account. In which rural average among the adult population is 39% against 60% in Urban India.

Financial inclusion is new paradigm of economic growth which plays a major role in driving away the poverty.
Lack of access to financial services in most of rural areas due to high informative barriers and low awareness,
poor functioning and financial history of financial institutions, near absence of insurance and pension service
create the need and scope of financial inclusion

Sustained growth of the nation and its continued prosperity depend critically on universal financial services
covering all people.

Financial inclusion means the provision of affordable financial services, viz., access to payments and remittance
facilities, savings, loans and insurance services by the formal financial system to those who tend to be excluded
(Thorat, 2006).

t not only enhances overall financial intensity of agriculture but also help in increasing rural nonfarm activities
which lead to development of rural economy and improve economic condition of people. Financial inclusion
include micro credit, branchless banking, no- frills bank accounts, saving products, pension for old age,
microfinance, self help group, entrepreneurial credit etc.
In short Financial Inclusion is:
NFA + Banks+ OFIs+ MFI+ IT = Financial Inclusion

Where, NFA-Nofrillsbankaccount OFIs - Other financial Institutions MFI - Micro financial Institutions

IT – Information Technology
Thus, financial inclusion needed for equal opportunities to all section of people in country, inclusive growth,
economic development, social development and business opportunity.

Around 45% of Indian population suffers from poverty and hunger in which only 31% has access banking
services and 80% populations are without life, on-life and health insurance etc

here are various statistical sources explains the need and effect of financial inclusion in the country. Around
45% of population in India suffers from poverty and hunger in 31% has access banking services. In India 403
million population are mobile users in which 46% of didn’t have bank account. On all India basis 41% of adult
population in the country are unbanked where in rural area coverage is 39% against 60% in urban areas. These
unbanked populations are higher in the North eastern, and eastern region. A bank account is not only everything
about financial inclusion as indicator.

In credit market only 14% of adult population has loan accounts. In which in rural area it is 9.5% against 14% in
urban area. On the basis of some statistical data we find that the regional situation of credit coverage is 25% for
southern region where 7% in north eastern, 8% in eastern and 9% in central region. In India 51.4% farm
household populations have no access to any formal and non formal source of credit where 73% have no access
to formal source of credit. Know your customer (KYC) procedure was very critical to understand and need
enough knowledge about it. 80% of the population in India is without life, health and non-life insurance cover,
where life insurance is used by 4% and non-life insurance is lower 0.6%.Only 5.2% of India’s 650,000 villages
have bank branches of overall branch network of Indian banks. Government has given priority to financial
inclusion because only 40% of the country population has bank account, where only about 38% of 85292 bank
branches in rural area.

https://www.cgdev.org/sites/default/files/roiw12101_updated.pdf - A savings by and for

the poor

https://www.investopedia.com/terms/f/financial-inclusion.asp What is financial Inclusion ?

[Important: In 2016, the World Bank stated that around 2 billion people
worldwide don’t use formal financial services and more than 50% of
adults in the poorest households are unbanked].

https://timesofindia.indiatimes.com/business/india-has-second-largest-unbanked-population-
in-the-world/articleshow/64570254.cms - Unbanked Population

https://www.moneyandbanking.com/commentary/2017/11/5/banking-the-unbanked-the-
indian-revolution - Banking the unbanked

https://www.investopedia.com/terms/f/financial-inclusion.asp - What is financial Inclusion

https://www.slideshare.net/KimberleeLuce/the-rising-bottom-of-the-pyramid-in-india - The
rising bottom of the pyramid
https://nextbillion.net/microfinance-india-small-finance-banks/ - Moving post micro finance

https://www.cgdev.org/sites/default/files/roiw12101_updated.pdf - A research, review and

agenda ( Paper )

https://www.slideshare.net/sk_prince/rural-banking-in-india - Rural Banking in India

https://www.northeasttoday.in/north-east-has-become-the-focus-of-regional-development/

https://www.northeasttoday.in/north-east-has-become-the-focus-of-regional-development/