Rural banking through ICT

Om Pal (07405702)
Under Guidance of
Prof. Krithi Ramamritham and Prof. U.B. Desai

Department of Computer Science and Engineering,

Indian Institute of Technology, Bombay

07/11/16

CS671 Seminar: Rural Banking

Through ICT

Present Status (India)

Rural population of about 780 million with limited
access to financial services.
Informal credit in India amounts to Rs.3.5 lac cr.
A high proportion of rural lending is from informal
sources.
About 500-600 million people in India still do not
have bank accounts.

07/11/16

CS671 Seminar: Rural Banking

Through ICT

Present Status Cont..

Rural economy (agriculture + non-agriculture)
constitutes about 50% of GDP.
Banks have woken up to the potential in the rural
sector .
current demand for credit in Rural India is around
Rs.1,33,000 crores.
Commercial Bank branches cover only 7% of rural
sector and large market is still untapped.
07/11/16

CS671 Seminar: Rural Banking

Through ICT

Present Income Status

07/11/16

CS671 Seminar: Rural Banking

Through ICT

What is needed from Banks

Focus on non farm rural business.
Greater levels of financial inclusion.
Reach out to the needy through micro
credit/SHGs(Self Help Group).
Easy and affordable financial services through the
best use of technology.
07/11/16

CS671 Seminar: Rural Banking

Through ICT

 Expand reach through alternate channels.

exclusive focused attention to the financial Inclusion
of unbanked rural area.
To extend banking services at the customers
convenience.
Improvement in service levels in Rural Areas.

07/11/16

CS671 Seminar: Rural Banking

Through ICT

Ultimate Goal Should Be..

07/11/16

CS671 Seminar: Rural Banking

Through ICT

Possible Rural Financial Inclusion

07/11/16

CS671 Seminar: Rural Banking

Through ICT

Rural banking faces twin challenges

BANKING in rural India is facing with the twin
challenges of regulation and distribution.
Regulation with respect to banking has been designed
for delivery in urban India.
Distribution required more manpower to be deployed
in rural area.
Rs 1-crore business in microfinance required 30
people in terms of manpower, the same volume of
business in other portfolios required only one person.
07/11/16

CS671 Seminar: Rural Banking

Through ICT

Case Study - SBI

The Bank is actively involved since 1973 in nonprofit activity called Community Services Banking.
Micro finance deeply ingrained in SBI.
Social obligation services like E-Ticketing.
Comprehensive financial services, viz., savings,
credit, remittances, insurance and financial products
through ICT.
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CS671 Seminar: Rural Banking

Through ICT

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Some Rural Projects Of SBI

SBI TINY ACCOUNT Opening of simple savings accounts for the villagers with zero
balance.
One of the villagers as SBI Mitra.
Drop Box for depositing cash at the SBI Mitras shop / house.
Small emergency loan.
SBI Mitra assists in opening account.
Piloted in Bahirgaon village in Maharashtra.
07/11/16

CS671 Seminar: Rural Banking

Through ICT

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SBI TINY SMART CARDS

A smart card with photo and fingerprint.
Card serves as the account.
Can be used for govt disbursals, insurance and loan disbursals.
KCC
This is medium limit card of Rs.20,000.
Farmers can withdraw partial amount from card.
2.5% annual interest only on withdraw led amount.

07/11/16

CS671 Seminar: Rural Banking

Through ICT

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Impact of SHGs-SBI
6400 thousand women beneficiaries.
Increase in income.
Increase in expenditure on education, clothes and
health.
Improvement in status of women and their
confidence level.

07/11/16

CS671 Seminar: Rural Banking

Through ICT

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Improved health and hygiene.

Better housing.
Decline in social evils.

07/11/16

CS671 Seminar: Rural Banking

Through ICT

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Rural Bank and Microfinance in

Uganda (Case Study)
There are three government-recognized banks at
Wakiso, Mpigi, and Kiboga epicenters.

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CS671 Seminar: Rural Banking

Through ICT

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 The youngest bank is at Kiboga epicenter. This bank

received official government recognition and was
inaugurated in January 2007.
To date, the bank has 358 members (307 women and
51 men) and has disbursed loans to 207 women in 23
groups and 46 men in 5 groups.
Savings at the end of the first quarter 2007 stood at
24,047,150 Ugandan Shillings ($13,741), and shares
stand at 3,745,000 Shillings (~$2,140).

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CS671 Seminar: Rural Banking

Through ICT

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 Mpigi epicenter is the second oldest recognized bank in

Uganda. Formal recognition was obtained in January 2006.
the bank began with 119 members. Today there are 404
members, and members savings total 25,777,703 Shillings
(~$14,730).
Wakiso epicenter is home to the first governmentrecognized Hunger Project bank in Uganda.
The bank currently has 880 members and hopes to reach
1,000 by the end of the year.

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CS671 Seminar: Rural Banking

Through ICT

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 The bank is indeed growing and has become a model for

the whole Hunger Project-Africa microfinance program.
Wakiso rural bank now offers its members various types
of savings, loan, and insurance products.
Education and emergency loans are also in development.
With the help of above banks, Group and individual
income-generating projects are in running mode which
included pineapple farming and pig, goat, and poultryraising .

07/11/16

CS671 Seminar: Rural Banking

Through ICT

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Thank you

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CS671 Seminar: Rural Banking

Through ICT

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