26 Banking Awareness Financial Inclusion

Banking Awareness
Financial Inclusion
Banking Awareness
Financial Inclusion
Financial Inclusion
● Financial Inclusion means providing financial services for poor and low-income
individuals at affordable cost. It aims to address & bring solutions to the issues that
exclude people from participating in the financial sector.
● The Government of India has introduced several financial Inclusion schemes. They
are
i. Basic Savings Bank Deposit Account (BSBDA)
ii. Lead Bank scheme
iii. Pradhan Mantri Jan Dhan Yojana (PMJDY)
iv. Business correspondents
v. Stand up India scheme
Basic Savings Bank Deposit Account (BSBDA):
● It is a Zero Balance Savings Account that takes care of your simple banking needs
with a Free ATM card, cheque book and monthly Statement
● Establishment: August 2012
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Banking Awareness
Financial Inclusion
● This account shall not have the requirement of a minimum balance.
● No charges will be levied for non-operation/ activation of an inoperative Basic
savings Bank Deposit Account.
Features:
1. Account can be opened by any Individual who can open a regular savings Account.
2. The customer should have a complete KYC.
3. The Interest rates offered by it are the same as a savings bank account.
4. The customer cannot have any other savings bank account if they have a BSBDA in
a bank.
5. The Individual is eligible to have only one Basic savings Bank account in one bank.
6. If the customer already has a savings bank account, that has to be closed within 30
days of opening the BSBD Account.
Conditions:
1) Maximum balance in the account should not exceed Rs. 50000 rupees at any time
2) Total credit in the BSBD account should not exceed Rs.1 lakh in a year.
3) Total cash withdrawals and transfers shall not exceed Rs.10,000 in a month.
4) Small accounts are valid for 12 months initially, which may be extended by another
12 months if the person provides proof of OVDs.
5) Remittances from abroad cannot be credited to small accounts without completing
KYC formalities.
Services offered: Deposit, cash withdrawal, credit of money through electronic payment
channels, deposit/collection of cheques.
Lead Bank scheme:

Banking Awareness
Financial Inclusion
● Establishment: 1969
● Objective: To promote the role of banks in the overall development of the rural
sector.
● Recommendation: Prof. D. R. Gadgil Study group and Banker's committees.
● In 2009, the High-level committee that reviewed the scheme was headed by Usha
Thorat, to suggest reforms in the Lead Bank scheme. Enhance the business
correspondent model, making banking services in all villages having a population of
above 2000 & relaxation in KYC norms for small value Accounts.
● The lead Bank is expected to assume a leadership role in coordinating the efforts of
the credit Institutions and the government.
● The Lead Bank scheme aims to enhance the flow of bank finance to the priority
sector and other sectors.
● The Lead Banks are advised to focus attention on the need for achieving 100%
financial Inclusion through the penetration of banking services in the rural sector.
Pradhan Mantri Jan Dhan Yojana:
● Establishment: August 28, 2014
● Objective: To provide easy access to financial services such as Remittance,
Credit, Insurance, Pension, savings & Deposits Accounts to the poor and
needy section of our society.
Features:
1) Zero Balance accounts can be opened by Individuals.
2) Overdraft Facility is available.
3) Transfer of money is Simple.

Banking Awareness
Financial Inclusion
4) The overdraft facility of Rs.10,000 is available is available.
5) The amount Deposited earns an Interest Rate
6) Accidental Insurance cover – Rs.2 lakhs.
Eligibility:
● Must be a citizen of India.
● Should be at least 10 years of age.
● You should not have a bank account.
Benefits:
● Rupay Debit card is provided to PMJDY account holders.
● You will be eligible for Direct Benefit Transfer as well as other welfare schemes by
the government. Interest earned for the Deposited amount.
● Free Insurance coverage to cover the financial risks associated with Accidental
death or disablement.
● Overdraft allows you to access funds in financial emergencies.
● Account holders can check their balance using the mobile banking facility.
Business correspondents:
Banking Awareness
Financial Inclusion
● Establishment: 2006
● Objective: To aid the process of financial Inclusion and take banking to the remote
areas of the country.
● Business correspondents are retail agents engaged by banks to provide banking
services at locations other than a bank branch.
Role of BCs:
● Responsible for Disbursing small loans like agricultural loan sets.
● Handling Receipt & delivery of small value remittances & other payment Instruments.
● Creating awareness about savings & other bank products.
● KYC will be completed by BC.
● Opening of no-fill Accounts and other products.
● Cross-selling of financial products like Insurance / mutual fund Products etc.
● Filling out applications/account opening forms including nomination clause and
submission to the Bank.
Stand-up India:
● Establishment: April 15, 2016.
● Objective: To support entrepreneurship among women and SC&ST Communities
who are looking to obtain a loan to launch their business venture.
● This scheme provides bank loans within the range of Rs. 10 lakhs up to Rs. 1 crore
to at least one SC/ST & one Woman borrower from every bank branch to set up a
greenfield enterprise which may involve services, manufacturing or trade.
Eligibility:
Banking Awareness
Financial Inclusion
● SC/ST and women entrepreneurs above 18 years of age.
● In case of non-individual enterprises, 51% of the shareholding and controlling stake
should be held by either SC/ST and/or women Entrepreneurs.
● Borrower should not be in default to any bank/ financial Institution.
● Loans under the scheme are available only for greenfield Project.

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Banking Awareness

exclude people from participating in the financial sector.

i. Basic Savings Bank Deposit Account (BSBDA)

ii. Lead Bank scheme

iii. Pradhan Mantri Jan Dhan Yojana (PMJDY)

iv. Business correspondents

v. Stand up India scheme

Basic Savings Bank Deposit Account (BSBDA):

with a Free ATM card, cheque book and monthly Statement

● Establishment: August 2012

● This account shall not have the requirement of a minimum balance.

● No charges will be levied for non-operation/ activation of an inoperative Basic

savings Bank Deposit Account.

2. The customer should have a complete KYC.

days of opening the BSBD Account.

12 months if the person provides proof of OVDs.

5) Remittances from abroad cannot be credited to small accounts without completing

channels, deposit/collection of cheques.

Lead Bank scheme:

● Recommendation: Prof. D. R. Gadgil Study group and Banker's committees.

correspondent model, making banking services in all villages having a population of

the credit Institutions and the government.

sector and other sectors.

Pradhan Mantri Jan Dhan Yojana:

● Establishment: August 28, 2014

● Objective: To provide easy access to financial services such as Remittance,

needy section of our society.

1) Zero Balance accounts can be opened by Individuals.

2) Overdraft Facility is available.

3) Transfer of money is Simple.

4) The overdraft facility of Rs.10,000 is available is available.

5) The amount Deposited earns an Interest Rate

6) Accidental Insurance cover – Rs.2 lakhs.

● Must be a citizen of India.

● Should be at least 10 years of age.

● You should not have a bank account.

● Rupay Debit card is provided to PMJDY account holders.

the government. Interest earned for the Deposited amount.

● Overdraft allows you to access funds in financial emergencies.

areas of the country.

● Business correspondents are retail agents engaged by banks to provide banking

services at locations other than a bank branch.

● Responsible for Disbursing small loans like agricultural loan sets.

● Creating awareness about savings & other bank products.

● KYC will be completed by BC.

● Opening of no-fill Accounts and other products.

● Cross-selling of financial products like Insurance / mutual fund Products etc.

● Filling out applications/account opening forms including nomination clause and

submission to the Bank.

● Establishment: April 15, 2016.

● Objective: To support entrepreneurship among women and SC&ST Communities

who are looking to obtain a loan to launch their business venture.

greenfield enterprise which may involve services, manufacturing or trade.

● SC/ST and women entrepreneurs above 18 years of age.

● In case of non-individual enterprises, 51% of the shareholding and controlling stake

should be held by either SC/ST and/or women Entrepreneurs.

● Borrower should not be in default to any bank/ financial Institution.

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