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Extension of Banking Services for Financial Inclusion*

CASELET, FINANCIAL MANAGEMENT
ET Cases - GSMC, 6 Pages

Case Preview

Extension of Banking Services for Financial Inclusion

 

On September 4th 2014, this news made the headlines “Gujarat milkmen get their own bank accounts, ATM cards. A man, from Prime Minister Narendra Modi’s native district, Mehsana, has been ahead of him in launching a financial payment method similar to the former’s ambitious ‘Jan Dhan’ scheme. Joseph Verghese, 42, has given 60,000 milk producers their own bank accounts with an ATM card to boot!”1

India, the biggest democracy is known for highest percentage of financial exclusion. A country having the major percentage of global population also has a vast number of people outside the formal financial system as per Global Findex Report of 2012. The formal financial system in India has a huge capacity to provide financial services to the excluded population. The banking system in India has implemented different approaches to make the dream of Universal financial inclusion a reality but remained unsuccessful. Initially regional rural banks were formed in 1969 to promote banking in rural sector; later NABARD was launched for enabling microfinance to name a  few. A shimmering ray hope has rekindled with the Pradhanmantri Jan-Dhan Yojana (PMJDY) and under this scheme about 1.5 crore accounts were opened on the first  day, August 28th 2014, through thousands of camps across the country..........................

 



1 Hitesh Chavda, “Gujarat milkmen get their own bank accounts, ATM cards”, http://timesofindia.indiatimes.com/india/Gujratmilkmen-get-their-own-bank-accounts-ATM-cards/articleshow/41645341.cm, September 14th 2014

Teaching Note Preview

Extension of Banking Services for Financial Inclusion

 

The case study deals with financial inclusion. It highlights the need for financial inclusion and methods adopted by banking services to achieve the financial inclusion.  The case study also deals with the new innovative trends in technology which has changed the traditional ways of banking to smart and alternative banking model like milk ATM, mobile-van Business facility, etc. The objective of this case study is to highlight on the issues/challenges in implementation of financial inclusion and  understand the new innovative techniques, models, resulting in extension of banking services initiated by many banks for financial inclusion.

Pedagogical Objectives

  • • To create an awareness about financial inclusion, its need, and various ways adopted by banks
  • • What are the issues or problems in implementing the plans for financial inclusion?
  • • To find out the solutions to overcome the issues or challenges in financial inclusion
  • • To know how banks have adopted technology for transformation of banks from core banking services to the technologically driven services
  • • To teach concepts like Financial Inclusion, transformation of banking services, application of IT in business

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Abstract

Under the financial inclusion plan the Reserve Bank of India (RBI) decided to provide financial facility at an affordable cost to people who are unable to utilize the benefits of the plan. For successful implementation of this plan, RBI instructed banks to make financial services available in the rural areas also. New innovative trends in  technology has changed the traditional ways of banking with smart and alternative banking models like – Milk ATM, Mobile-van Business Facility, etc. The objective of this case study is to understand the new innovative techniques, models, resulting in extension of banking services initiated by many banks for Financial Inclusion.

The approach for this case study is data collected from various banks (both primary and secondary sources) and the methods used to address the issue on Financial Inclusion. Among various innovations Electronic Benefit Transfer system facilitates smooth financial transaction and decreases money leakage. Similarly, extension of banking services not only will register an increase in bank accounts but will also facilitate the long term goal, of RBI and the Government, of economic growth and prosperity.



Pedagogical Objectives

  • To create an awareness about financial inclusion, its need, and various ways adopted by banks
  • To comprehend the issues or problems in implementing the plans for financial inclusion?
  • To find out the solutions to overcome the issues or challenges in financial inclusion
  • To know how banks have adopted technology for transformation of banks from core banking services to the technologically driven services
  • To understand the concepts like Financial Inclusion, transformation of banking services, application of IT in business

Case Positioning and Setting

  • Financial Inclusion, ICT, Business Innovations
  • * GSMC 2014, IIM Raipur

    This Case Pack Includes:
    - Abstract
    - Caselet
    - Teaching Note (**ONLY for Academicians)
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