FINANCIAL INCLUSION OF UNDERPRIVILEDGED A STUDY OF SOLAPUR DISTRICT D. A. V. Velankar College of Commerce, Solapur-4132 1. INTRODUCTION TO FINANCIAL INCLUSION: A sizeable majority of the population, particularly the low income groups, continue to remain excluded from the opportunities and services provided by the financial sector. India has adopted a multi-layer approach towards financial inclusion. The major financial inclusion initiatives taken were introduction of SHG-bank linkage programme, Farmers Club programme and introduction of Kisan Credit Card programme. While these systems meet the needs of modern economy, they leave the financially excluded sections of the population untouched. This calls for a conscious attempt to build simple, user friendly and cost-effective products and services that cater to the needs of the poor and excluded sections of the society. 2. RBI INITIATIVES FOR FI: The Reserve has initiated a number of measures in recent years to improve the credit delivery mechanism and bring society. s have been urged to make available a basic banking 'no frills' account either with 'nil' or very low minimum balances as well as charges. As a result of the measures taken for financial inclusion, there was an increasee of 6 million new 'no frills' bank accounts between March 26 and March, 27. Regional Rural s have been advised to allow limited overdraft facilities in 'no frills' accounts, without any collateral. The 'Know Your Customer' (KYC) procedure for opening accounts has been simplified so that people from low-income groups do no face problems in opening new accounts. s have been asked to consider introducing a General Purpose Credit Card (GCC) facility in the nature of revolving credit up to Rs.2,/- without insisting on security or purpose, at their rural and semi-urban branches. GCC loans are treated as part of the banks' priority sector lending. SR No. Particulars Dr. S. V. Shinde drsvshinde@gmail.com about maximum financial inclusion of the poorer sections of the Table no.1.performance of financial inclusion in India Year ended Mar 1 Year ended Mar 11 Year ended Mar 12 Prog. Upto Dec 212 1 Total No. of Branches 847 9114 99242 1339 2 No. of Rural Branches 33433 34811 37471 39127 3 No. of branches in unbanked villages 3381 4323 4 Total number of CSPs deployed 3432 6993 11648 12328 ing Outlets >2 -Total 37791 66447 11213 118718 6 ing Outlets <2- Total 2993 49761 69623 9216 7 ing Outlets - Branches 33378 34811 37471 39127 8 ing Outlets - BCs 34174 882 141136 16838 9 ing Outlets - Other Modes 142 9 3146 3727 1
1 ing Outlets -TOTAL 67694 11628 18173 211234 11 Urban Locations covered through BCs 447 3771 891 179 12 BSBDA Total (No. in lakh) 734.3 147.9 138.4 1714.27 13 BSBDA Total Amt. (Amt. in ` crores) 1.71 7612. 124.62 178.3 14 OD facility availed in Basic Savings Deposit A/c (No. in lakh) 1.83 6.6 27. 32.82 1 OD facility availed in Basic Savings Deposit A/c (Amt. in ` crores) 9.98 26.48 18.41 13.17 16 KCCs-Total-No. in Lakh 243.7 271.12 32.3 317.33 17 KCCs-Total-Amt In ` Crores 1247.6 16.4 26839.3 249139.78 18 GCC-Total-No. in Lakh 13.87 16.99 21.8 31.14 19 GCC-Total-Amt In ` Crores 31.87 37.6 4184.41 766.3 2 ICT A/Cs-BC-Total Transaction -No. in lakhs 26.1 841.64 141.93 1837. 21 ICT A/Cs-BC-Total Transactions Amt. in ` crores 692.7 8.42 928.93 1633.34 3. DEFINITION OF FI: United Nations A financial sector that provides access for credit for all bankable people and firms and saving and payment services to everyone. Inclusive finance does not require that everyone is eligible to use each of services but they should be able to choose them if desired. Asian Development provision of broad range of financial deposits, loans, payment services, money transfer and insurance to poor and low income house-holds and their micro enterprises. Indian Definition: The Committee on Financial Inclusion (Chairman: Dr. C. Rangarajan) has provided a working definition for Financial Inclusion as It is also termed as delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. 4. NEED OF THE STUDY: Developing countries of late have been attaching greater importance to finance in the pursuit financial services not only supports economic efficiency and distributional equity but also contributes to financial stability and social enhances the welfare of both Source- RBI bulletin-various volumes cohesion. It is acknowledged that access to services such as of an effective means in capitalizing economic opportunities and addressing poverty. Access to financial resources producers and consumers. Access to the financial services helps individuals apply their skills in engaging in small entrepreneurial activities and thereby providing them enhanced opportunities to improve their income. Easy, reliable and timely access to the finance 2
reduces poverty through increased income and hence positively contributes to reduce the income inequality.. TITLE OF THE RESEARCH STUDY: FINANCIAL INCLUSION OF UNDERPRIVILEDGED A STUDY OF SOLAPUR DISTRICT 6. OBJECTIVES OF THE STUDY: 1. To study the nature and extent of social exclusion and inclusion in India. 2. To examine the role the of the banks in financial inclusion of weaker section in Solapur district. 7. METHODOLOGY: 1. COLLECTION OF DATA: As the study is related to financial inclusion the data related to financial exclusion and inclusion in Solapur District has collected. For the present study secondary data has been used. Secondary data which has collected from Government offices relating to inclusive growth policies and programmes and financial inclusion. The literature related to the present study has been collected books, Government reports, journals, magazines, internet etc, unpublished thesis, dissertations from various Universities. 2. Data processing and statistical Tools: All the questionnaires were processed and tabulated. The data has been analyzed by using various statistical tools viz. percentages, averages and ratio analysis etc. to establish the relationship between the variables. The stratified random sampling was employed only. 1. SAMPLE SELECTION- Table No.2-Selection of managers Sr. No. 1 AKKALKOT 2 BARSHI 3 KARMALA 7 MOHOL 8 PANDHARPUR 9 SANGOLA Taluka Sample Of Managers 4 MADHA MALSIRAS 6 MANGALWEDHA 1 SOUTH SOLAPUR 11 NORTH SOLAPUR TOTAL Source-field survey 3
4. METHODS OF ANALYSIS: For the analysis and interpretation of the data various statistical tools and techniques has been used. Various computer software e.g. S.P.S.S., MS-Office, EXCEL etc. has used for the same. The combination of qualitative and quantitative, method of research has been used for the study.. AREA OF THE STUDY: The Solapur district has been selected for the present study. 6. PARAMETERS OF THE STUDY: The parameters considered for the present study are financial exclusion, inclusion, banks credit to deprived classes, women, SC, ST, OBC, Minority, role of banks. 7. SPAN OF THE STUDY: present study. The five years from 27 to 212 i.e. period of 11th five year plan has been selected for the 8. LIMITATIONS OF THE STUDY:. The focus of study is limited only to the FINANCIAL INCLUSION OF SOLAPUR DISTRICT. The data has been collected relating to the period of 11 th Five Year Plan i.e. years from 27-212 only. 8. ANALYSIS AND INTERPRETATION OF DATA: Table no. 3.BANK BRANCHES NETWORK IN THE DISTRICT AS ON 28-2-211 Sr. No. Total Sr. Branches No. 1 ALLAHABAD BANK 1 18 S.B.H 2 ANDHRA BANK 1 19 S.B.M 3 B.O.I 4 2 UNION BANK Total Branches 4 1 4 B.O.M 37 21 UCO BANK 2 B.O.B 1 22 IDBI BANK 9 6 C.B.I 12 23 UNITED BOI 1 7 CANARA BANK 4 24 VIJAYA BANK 2 8 CORPORATION BANK 1 2 ING VYSYA BANK 1 9 DENA BANK 4 26 ICICI BANK 7 1 INDIAN BANK 1 27 HDFC BANK 2 11 I.O.B 2 28 FEDERAL BANK 12 KARNATAKA BANK 1 29 ORIENTAL BANK 1 13 P.N.B. 2 3 KARUR VYSYA BANK 1 14 RATNAKAR BANK 2 Total 216 1 AXIS BANK 4 31 W.K.GRAMIN 3 16 SYNDICATE BANK 2 32 SDCC BANK 219 17 STATE BANK 32 Grand Total 46 13 4
Table 4.TALUKA WISE BANK NETWORKIN THE DISTRICT AS ON 28-2-211 8.1 SC/ST ADVANCES Sr. No. Branch Total no.of Branches 1 2 3 4 6 7 8 9 1 11 12 AKKALKOT 3 BARSHI 1 KARMALA 26 MADHA 42 MALSIRAS 61 MANGALWEDHA 24 MOHOL 3 PANDHARPUR 12 SANGOLA 37 SOUTH SOLAPUR 41 NORTH SOLAPUR 22 SOLAPUR CITY 84 TOTAL 46 Scheduled Castes (SCs) & Scheduled Tribes (STs) Advances has been given special emphasis for the development of this particular group. s are mandated to take the following measures to step up their advances to SCs / STs: The district credit plans formulated by the lead banks should be elaborated to indicate clearly the linkage of credit with employment and development schemes. s will have to establish closer liaison with the District Industries Centers, which have been set up in different districts for promoting self-employment. Credit planning should be weighted in favor of Scheduled Castes / Scheduled Tribes. Loan proposals of these communities should be considered sympathetically and expeditiously. Non release of subsidy upfront amounts to under-financing and hampers asset creation / income generation. Advances sanctioned to State sponsored organizations of SC / ST, for the specific purpose of purchase and supply of inputs to and / or the marketing of outputs of the beneficiaries viz. artisans, village and cottage industries of these organizations, should be treated as Priority Sector Advances. Table No..SC/ST Advances Analysis in Solapur District from27-212(rs in ) Sr.No. 27 28 29 21 211 1 Allahabad 2862 1342 147 142 1247 2 Andhra 8 426 141 161 1346 3 Of India 268 271694 166477 19831 263782 4 Of Baroda 2914 4637 2672 4818 9849 Of Maharashtra 132663 1863 2922 19736 68873 6 Central 1364 146 12999 2231 241 7 Canara 1968 18963 412 47 8383 8 Corporation 493 2413 18 9 Dena 17 697 2216 122 1 Indian 2899 33 3797 1632 677 11 Indian Overseas 38 11 18 427 1786
12 Karnataka 476 338 23 264 13 Punjab National 724 76 998 292 792 14 Ratnakar 112 12 7 68 94 1 State Ind. 36 18489 1879 472 2241 16 State Hyderbad 13 3793 39 6766 1177 17 State Mysore 1423 2468 398 31 18 Syndicate 17472 2741 2 3322 1973 19 Sangli Ltd. 1412 - - -- -- 2 Union 3339 4317 193 9213 29428 21 United B. O. I. 146 12 27 22 UCO 286 12 283 1998 2693 23 IDBILtd. 1236 1377 274 1661 817 24 Vijaya 43796 7737 11837 472 2479 2 ING Vysya 28 7 26 ICICI 46797 414 4231 27 UTI Ltd. 1832 - - - - 28 HDFC Ltd. 399 248 138 232 43 29 Axis Ltd - 91 3 Federal Ltd - 319 44 31 Oriental - - - 431 32 KarurVysya Total Commercial s - 7461-82427 - 7736 1232197 333242 33 SolapurGramin W. K. Gramin 36812-42278 - 27963 1298 48747 34 SolapurDcc Grand Total 61873 8947 82999 1241 1898 36947 Source: Computed on the basis of Annual Reports and District Collectorate Office Reports Graph No. 1: Analysis of SC/ST Advances by Top 1 s in Solapur District from 27-212 Rs. In Lakh 3 3 2 2 1 1 Graph No.1 shows that State of India topped in total number of SC/ST advances with lakhs 27-211. of Maharashtra stood second in topped total number of SC/ST advances with 11412 lakhs from 27-211. of India ranked third total number of SC/ST advances with 9462 lakhs from 27-211. of Baroda ranked fourth total number of SC/ST advances with 6
9321 lakhs from 27-211. Canara stood fifth total number of SC/ST advances with 3822 lakhs from 27-211. While Vijaya, Union, ICICI and Syndicate ranked sixth, seventh, eighth and ninth total number of SC/ST advances respectively. 8.2 WEAKER SECTION ADVANCES According to the RBI following are included under weaker sections in Priority Sector and given loans Beneficiaries of Swarnjayanti Gram SwarozgarYojana (SGSY), now National Rural Livelihood Mission (NRLM); Scheduled Castes and Scheduled Tribes; Beneficiaries of Differential Rate of Interest (DRI) scheme; Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY); Beneficiaries under the Scheme for Rehabilitation of Manual Scavengers (SRMS); Loans to Self Help Groups; Loans to distressed farmers indebted to non-institutional lenders; Loans to distressed persons other than farmers not exceeding `, per borrower to prepay their debt to non-institutional lenders; Loans to individual women beneficiaries up to `, per borrower; A key component of the financial inclusion plan of the Reserve of India was to ask banks across India to open 'no frills account'. While some banks did fix a bare minimum balance for such accounts, other banks permitted customers to maintain zero balance. The s are extending an automatic overdraft facility to the tune of Rs to Rs 2, depending on their banking transactions, and none of these overdrafts have gone in to default. Table No. 6: Weaker Section Advances by s in Solapur District from 27-212 (Rs in ) Sr. No. 27 28 29 21 211 1 Allahabad 4832 2687 126 28 18 2 Andhra 918 16 161 1946 3 Of India 47899 46277 412 49993 1913 4 Of Baroda 187367 8262 13977 188962 26819 Of Maharashtra 81234 1694 143763 11143 147968 6 Central 17 838 4442 1429 1429 7 Canara 2284 29696 2294 2317 2328 8 Corporation 1972 97 77 2388 211 9 Dena 1721 1448 13 313 11773 1 Indian 3648 3863 1146 7 9637 11 Indian Overseas 43 11 18 427 971 12 Karnataka 83 43 1 111 1289 13 Punjab National 7121 8498 274 21931 1226 14 Ratnakar 1714 126 212 2394 1 State Ind. 7423 1327 164 223879 37281 16 State Hyderbad 287 17114 31 321 123 17 State Mysore 3 342 7 7 1 18 Syndicate 213 1279 2494 648 4312 19 Sangli Ltd. 18466 - - - - 7
2 Union 846 92817 12214 82649 874 21 United B. O. I. 721 168 22 Uco 226 199 3138 3218 4398 23 IDBILtd. 6292 7764 89171 3834 19877 24 Vijaya 11428 488 66 7129 13 2 IngVysya 7 26 ICICI 4742 48162 99943 27 Uti Ltd. 11 - - - - 28 Hdfc Ltd. 399 248 138 332 8874 29 Axis Ltd 1716 3 Federal Ltd 2 76 31 Oriental 32 32 KarurVysya Total Commercial s 24267 211439 219771 2364289 3371 33 SolapurGramin W. K. Gramin 384867 3917 4721 833 9762 34 SolapurDcc Grand Total 21123 493617 2483177 4992391 197182 422143 192833 437767 2937182 63344 Source: Computed on the basis of Annual Reports and District Collectorate Office Reports Solapur DCC had highest number of Advances to Weaker Section from 27 to 211. While State of Mysore, HDFC, ING Vysya, Federal and ING Vysya had lowest number of Advances to Weaker section in 27, 28, 29, 21 and 211 respectively. Graph No. 2: Weaker Section Advances by Top 1 s in Solapur District from 27-212 Rs. In Lakh 7 6 4 3 2 1 Graph No.2 shows thatt of Maharashtra topped in total number of Weaker Section advances with lakhs 27-211. of India stood second in topped total number of Weaker Section advances with 11412 lakhs from 27-211. State of India ranked third total number of Weaker Section advances with 9462 lakhs from 27-211. of Barodaa ranked fourth total number of Weaker Section advances with 9321 lakhs from 27-211. Union stood fifth total number of Weaker Section advances with 3822 lakhs from 27-211. While Vijaya, ICICI, Central and Indian ranked sixth, seventh, eighth and ninth total number of Weaker Section advances respectively. 8
8.3 WOMEN ADVANCES Table No. 7. : Women Advances Analysis of Solapur District from 27-212(Rs in ) Sr.No. 27 28 29 21 211 1 Allahabad 1492 1264 8482 24 171 2 Andhra 11476 8714 8673 7982 7438 3 Of India 487 711161 16321 1847 26174 4 Of Baroda 9216 42683 411 241 47 Of Maharashtra 36473 3743 4689 47674 76231 6 Central 33714 3289 1769 27847 27847 7 Canara 23969 218 281 8 Corporation 1623 212 37 941 32 9 Dena 14 16269 438 8834 1 Indian 9427 78 113 19 3821 11 Indian Overseas 288 1124 13 373 12 Karnataka 372 24 73 923 198 13 Punjab National 12446 163 21729 297 2843 14 Ratnakar 792 87 992 82 1 State Ind. 2432 3884 132 681 328748 16 State Hyderbad 783 16799 12419 8216 133 17 State Mysore 1969 172 17 691 14 18 Syndicate 183 2128 23143 42643 48214 19 Sangli Ltd. 146 - - - - 2 Union 677 61782 49439 12247 462 21 United B. O. I. 18178 668 84 288 22 Uco 4986 38 1629 449 4384 23 IDBILtd. 9348 1118 31421 3296 3466 24 Vijaya 16718 28676 28771 2773 3784 2 IngVysya 43 31 26 ICICI 142 196863 27 Uti Ltd. - - - -- 28 Hdfc Ltd. 4178 3343 493 232 314 29 Axis Ltd 4917 3 Federal Ltd 298 8916 477 31 Oriental 219 32 KarurVysya Total Commercial s 1479 196932 1623 18793 492924 33 SolapurGramin W. K. Gramin 784 9777 7761 9334 89227 34 SolapurDcc Grand Total 8787 1713433 249 1143138 1938689 18328 1768 Source: Computed on the basis of Annual Reports and District Collectorate Office Reports In 27 and 28, of India had highest number of Women Advances while ING VYSYA had lowest number of Women Advances. In 29 of Maharashtra had highest number of Women Advances & Karnataka had lowest number of Women Advances. State of India had highest number of Women Advances in 21 and 211. Ratnakar and State of Mysore had lowest number of Women Advances in 21 and 211. 9
Graph No.3.Analysis of Women Advances by Top 1 in Solapur District Rs. In Lakh 4 4 3 3 2 2 1 1 Graph No..8 shows that State of India topped in total number of women advances with 2883 lakhs 27-211. of Maharashtra stood second in topped total number of women advances with 11412 lakhsfrom 27-211. of India ranked third total number of women advances with 9462 lakhs from 27-211. ICICI ranked fourth total number of women advances with 9321 lakhs from 27-211. Union stood fifth total number of women advances with 3822 lakhs from 27-211. While IDBI, of Baroda, Sydicate, UCO and Vijaya ranked sixth, seventh, eighth and ninth total number of women advances respectively. 9. FINDINGS: 1. of India had highest number of SC/ST Advances in 27 and 28. ING Vysya and Ratnakar had lowest of SC/ST Advances in 27 and 28 respectively. In 29, of Maharashtra had highest number of deposits & ING VYSYA BANK had lowest number of deposits. State of India had highest number of SC/ST Advances in 21 and 211. Ratnakar and Federal had lowest number of SC/ST Advances in 21 and 211 respectively. 2.Solapur DCC had highest number of Advances to Weaker Section from 27 to 211. While State of Mysore, HDFC, ING Vysya, Federal and ING Vysya had lowest number of Advances to Weaker section in 27, 28, 29, 21 and 211 respectively. 3. In 27 and 28, of India had highest number of Women Advances while ING VYSYA had lowest number of Women Advances. In 29 Of Maharashtraa had highest number of Women Advances & Karnataka had lowest number of Women Advances. State Of India had highest number of Women Advances in 21 and 211. Ratnakar and State Of Mysore had lowest number of Women Advances in 21 and 211. 1
REFERENCES: 1. Solapur District Social And Economic Survey Report 2. SLBC Report Of Maharashtra Pune Head Office 3. District Lead Reports Solapur 4. District Registrar Of Co-Operative Societies District Solapur 11