banking in the hinterland by mathew joseph asst general manager andhra bank head office::hyderabad a...

BANKING IN THE HINTERLAND

BY

MATHEW JOSEPH

ASST GENERAL MANAGER

ANDHRA BANK

HEAD OFFICE::HYDERABAD

ANDHRA BANK

COMMUNICATION FOR RURAL PRODUCTS

&

RURAL MARKET ACCESS

DATE : 14th February, 2007

ANDHRA BANK

• The Rural Scene in India

• Deposit & Credit Schemes Offered By Banks

• Communication of Rural Banking Products & Communication through IT & through Rural Institutes

• Financial Inclusion

• New Initiatives

DISCUSSION OUTLINE

ANDHRA BANK

RURAL SCENE

ANDHRA BANK

OBJECTIVES

1. Poverty Reduction 2. Benefit of Globalization to Grass Root Rural

Enterprises

• WHY THESE OBJECTIVES :• INDIA GLOBAL AVERAGE

70% Rural 30% Rural30% Urban 70% Urban

ANDHRA BANK

RURAL BANKING

• A recent World Bank-NCAER Survey on rural access to finance indicates -

• 70% of the rural poor do not have a Bank Account and 87% have no access to Credit from formal source.

• India has an extensive Banking Infrastructure comprising over 46,000 Rural & Semi Urban Branches of Commercial Banks over 14,000 branches of RRBs, around 12,000 branches of DCCBs and nearly 1,00,000 cooperatives credit societies at the village level.

ANDHRA BANK

RURAL SCENE IN INDIA

There is at least one retail credit outlet on averageFor about 5,000 rural people, which translates intoone outlet for every 1,000-house holds.

• 30% of population still lives below poverty line.• Indebtedness is the main feature.

Rural poverty is linked to unemployment, underemployment, low levels of productivity, severedemographic pressures and illiteracy.


ANDHRA BANK

ANDHRA BANK

Out of 6,34,321 villages in India, only 9,000 villages have more than one branch. As on March 2006 each bank branch is catering services to 12 villages.

The population per rural branch declined from 2,01,854 in 1969 to 16,000 at present (as on March 2006).

The proportion of borrowings of rural house holds from institutional sources increased from 7% in 1951 to more than 60% at present.


ANDHRA BANK

Despite large network of branches, majority of rural poor remained outside banking purview.

Rural poor need credit frequently and mostly in small quantities for consumption purposes.

In India, almost 27.09 percent of the rural population and more than 23.62 percent of the urban population are below the poverty line.


ANDHRA BANK

Population Group Number of Branches

Percentage

RURAL 30,587 44%

SEMI-URBAN 15,484 22%

URBAN 12,101 17%

METRO 11,260 17%

TOTAL 69,382 100%

BRANCH NETWORK

ANDHRA BANK

INDIAN BANKING SYSTEM

RURAL BANKING

The share of bank finance in the sphere of rural credit has considerably increased since 1950s, agriculture and allied activities being the focal point therein. Credit expansion has been streamlined to accelerate its flow in to the priority sector.

ANDHRA BANK

DEPOSIT & CREDIT SCHEMES

ANDHRA BANK

• Current Deposits• Insurance Linked

Current Deposits• Savings Bank• Insurance linked

savings accounts• Insurance linked

savings to kids

VARIOUS DEPOSIT SCHEMES OFFERING BY BANKS

• Non Res. Ord. Act.• Non Res. Ext. Rup.

Ac• Fixed Deposit• Cumulative Deposit• Recurring Deposit• FCNR (B)• Resident Foreign

Currency (Dom.Ac)

ANDHRA BANK

• Kisan Credit Card• Kisan Vehicle

Loans• Kisan Produce

Loans• Agriclinics• Rural Godowns

AGRICULTURAL SCHEMES

• Farm Mechanization• Land Purchase

scheme• SHG Credit Card-life

& health cover to SHGs

• Artisan Card• Laghu Udyami

Credit Card (LUCC)• Swarojgari card

etc.,

ANDHRA BANK

RETAIL BANKING

Personal Loans Consumer Loans Automobile Loans Clean Loans Mortgage Loans Educational Loans Housing Loans Loans Ag. Share & Securities Gold Loans

ANDHRA BANK

The share of bank finance in the sphere of rural credit has considerably increased since 1950s, agriculture and allied activities being the focal point therein.

Credit expansion has been streamlined to accelerate its flow in to the priority sector.

RURAL MARKETING

ANDHRA BANK

Today’s banking is not simple selling Every customer has different need Every customer has multiple needs The customer needs are ever changing The competition is global Traditional sources of income is coming down Importance of Profit is increasing rapidly

WHY MARKETING ?

ANDHRA BANK

COMUNICATION PROCESS

ANDHRA BANK

COMMUNICATION OF RURAL PRODUCTS

In the present era of aggressive banking publicity plays a dual role of building up the corporate image of the Banks.

Making people aware of various schemes of the organisation.

Banks are committed to the upliftment of the rural masses by building awareness about the services rendered and various products of the banks.

ANDHRA BANK


Hoardings / wall

PaintingsBanners

To keep hoardings/wall paintings / banners at strategic places / in the local centers /in major service area villages. Boards / wall paintings in front of MRO / MDO offices/ in village shandies etc.

Creation of fixed assets– for the benefit of community

To give T.Vs, Water coolers, Fans to the village temples / SHGs / to keep in community halls etc.,. And also water storage tanks for village community / Community bore wells etc., may be sponsored. Books to the village library, Cement linings around trees to use as “Ratch Banda”

ANDHRA BANK


Arranging workshops / Seminars /camps /

melas / village fairs.

Banks to arrange workshops / seminars / village fairs etc., in selected places by inviting eminent personalities / Agrl.Scientists etc., In the workshops our schemes / services are to explained.

Campaigns throughburrah kathas /Playlets etc., in service area villages.

Banks to select popular – burrahkatha / play let groups of local area and send them to branches to give their performance along with our bank schemes in selected service area villages.

ANDHRA BANK


Paintings on the RTCbuses plying in the ruralareas

Rear of buses preferablyin vernacular languages.

To give advertisements of our bank schemes by way of paintings on RTC buses plying in rural areas.

Advertisements in TV – in Rythu Mithra programme etc., and Radio.

To give advertisements in T.V / Radio about our schemes especially in Farmer’s / rural programmes.

ANDHRA BANK


Others – give away itemsfor distribution amonglarge number of people.

Small gift items may be distributed among the selected customers

Shelter for bus stops

Bank may sponsor for construction of bus shelters at bus stops of major centers of service area villages. And our bank schemes to be displayed on the bus shelters.

ANDHRA BANK


Tree plantation / providingtree guards with provisionfor people to sit.

To arrange for tree plantation in community areas and provide tree guards with advertisement of our bank schemes.

Erection of cycle / rickshaw / auto stands.

In some major centers of the service area / local areas of the branches, bank may sponsor erection of cycle / rickshaw / auto stands, with advertisement of our schemes.

ANDHRA BANK


Advertisements in RuralCinema theatres.

Advertisements about our schemes may be given in cinema theatres of the service area.

Providing lamp posts / islands to decorate important junctions.

Bank may sponsor lamp posts / islands to decorate important junctions in Gram Panchayat / Municipalities, with advertisements of our bank schemes.

ANDHRA BANK


Community T.V.Preferable in villagecommunity halls.

Bank may sponsor T.V sets to temples / community halls of selected places to the benefit of community at large and use the item as advertisement of our bank.

Sponsor schools by providing black boards / slates/books/ scholarships / drinking water etc.,

Bank may Sponsor schools by providing black boards / slates/books/ scholarships /drinking water etc.,

Meritorius students may be encouraged by providing books / scholorships etc.,

ANDHRA BANK


Sponsor village dispensaries/ hospitals / veterinary

hospitalsby giving medicines /utilities.

Bank may sponsor village dispensaries / hospitals / veterinary hospitals by giving medicines /utilities.

Sponsor Telephone booths./Milk booths / Milk Collection centers.

Bank may sponsor telephone booths / Milk boohts / collection centers with our bank schemes advertisements.

ANDHRA BANK


Organise / participate in vegetable / animal / flower shows.

Bank branches may organize / participate in vegetable / animal / flower shows, with gifts to the best farmers and our bank schemes may be advertised in the shows.

Sponsor deserving farmers for seminars / talks and use them for rural awareness.

Bank may sponsor selected farmers for seminars / talks at district / state level and use them for rural awareness and recovery of loans.

ANDHRA BANK


Participate / sponsor in village fairs / melas by taking stall etc.,

Bank branches may Participate / sponsor in village fairs / melas and arranging our bank stalls in the melas for advertisement of our bank schemes.

Provide drinking water facilities / Hand pumps / water coolers etc.,

Bank branches may arrange to provide drinking water facilities / Hand pumps / water coolers at strategic centers / village mundies / fairs / shandies with advertisement of our bank services / products.

ANDHRA BANK


Arranging Farmer’s meets by

inviting subject matterSpecialists /

Agrl.scientists.

Banks to arrange Farmer’s meets in selected places of service area villages by inviting subject matter specialists /Agrl.scientists.

Training programmes ( Field visits to farmers)

Arranging field visits / training programmes to the farmers / rural youth on various rural activities.

ANDHRA BANK


Sponsoring medical / Veterinary camps in ruralareas.

Banks may sponsor medical / Veterinary camps in rural areas.

Construction of cement lining around trees in Villages, so as to use as “Ratch Banda” to use as Common place for the farmers.

Banks may sponsor for Construction of cement lining around trees in Villages, so as to use as “Ratch Banda” to use as Common place for the farmers.

ANDHRA BANK

Buyer & Seller meets in rural

areas.

Bank may arrange buyer & seller meets for various products of farmers and SHGs.

Sponsoring Self Help Group (SHG) members for workshops / seminars.

Bank may sponsor Self Help Group (SHG) members for workshops / seminars.


ANDHRA BANK

RURAL PEOPLE EXCLUDED FROM BANKING PRODUCTS

Poor people with little (or) no assets. People living in remote rural/tribal areas. People in lower end segment. Labourers. People living in semi-urban / urban slums. Tenant farmers (Oral tenancy), sharecroppers,

marginal farmers with smaller holdings. SC/ST/Minority people with little means. Destitute etc.

ANDHRA BANK

INDIAN POPULATION vis-à-vis BANK ACCOUNTS

Total population as per 2001 census 102.70 crs

Of which 19 years & above 54.10 crs

No. of Current Accounts in the banks as on 31.03.06

1.66 crs

No. of SB Accounts in the banks as on 31.03.06

30.43 crs

Total No. of Accounts 32.09 crs

No.of Accounts per 100 population 31

No.of Accounts per 100 adult Population 59

ANDHRA BANK

FINANCIAL INCLUSION

ANDHRA BANK

1. Opening of Savings Bank accounts (N0-frills accounts – with zero balance).

2. Issue of General Purpose Credit Card (GCC).

3. Defaulters cleansing Mechanism.4. Strengthening SHG Lending.5. Appointment of Business Facilitators /

Business Correspondents.

FINANCIAL INCLUSION - FEATURES

ANDHRA BANK

FINANCIAL INCLUSION - FEATURES

6. IT Connectivity.7. Insurance Products.8. Coverage of Tenant Farmers / share

croppers.9. Mapping indebtedness of the farmers and

to identify the unindebted farmers etc.

ANDHRA BANK

INSURANCE FOR RURAL POOR

• One of the most important components of financial services inclusion.

• Most of the poor people not covered under insurance.

• To cover the members of SHGs, small & marginal farmers who have taken loans from banks .

• As a social security measure, Govt. may examine to cover the poorest of the poor under life insurance, accidental insurance, health insurance – group policies.

ANDHRA BANK

RURAL AREAS FINANCIAL INCLUSION

• 100% coverage of accounts

• Covering the people with insurance products like crop insurance,life & health cover to SHGs

• Payment of pensions at villages through smart cards

• Provide credit to all through GCC

ANDHRA BANK

RURAL AREAS FINANCIAL INCLUSION

Inclusion through infrastructures:• Provide drinking water• Provide education• Pucca house /family• Good roads

For achieving all the above Banks, Government ,local rural panchayats have to work together.

ANDHRA BANK

RURAL AREAS FINANCIAL INCLUSION - IT

Installation of ATMs in rural areas .

Introduction of Mobile ATMs

ANDHRA BANK

RURAL BANKING – IT PRODUCTS

Introduction of "Rural Kiosks"

The rural kiosks will provide variety of services like accepting electricity bills, house taxes, up dated market information, birth certificates, land records, internet services etc.,.

Opening of satellite offices.

ANDHRA BANK

COMMUNICATION via RURAL INSTITUTES

• Banks are educating the poor through rural institutes

• Various banks have institutes at different Districts/States

• Women are also being trained

• Some banks are offering at free of cost.

ANDHRA BANK

Training Activities

1. Tailoring 2. Embroidery

3. Saree painting 4. Saree printing

5. Soft toys making 6. Quilts bags making

7. Jam/Juices making 8. Agarbathi Making

9. Cosmetics making 10.Detergents making

11.Candles making 12.Adda Leaf plate making

13.Papad making on machine 14.Hawai chappals making

15.Laces making etc

16. Articles with jute, Banana, Palm fiber


ANDHRA BANK


• All the rural people to be educated through banks institutes

• For each 50-100 villages one Institute

• Identify the activities & train the people accordingly to settle in their lives.

• Proposed to start a state level training institute funded by 5 banks,AP State Govt. & NABARD

ANDHRA BANK

NEW INITIATIVES

ANDHRA BANK

NEW INITIATIVES

• Entire banking system,State Govts to evolve in improving the financial inclusion.

• Education for all concepts are to be implemented wholeheartedly.

• Cooperative sector& RRBs which are connected with rural & poor mass to come forward for this social responsibility.

ANDHRA BANK

NEW INITIATIVES

• Present Kisan cards will be replaced by the High Tech smart Cards, which will be accepted in more agro -input merchant establishments in rural & semi urban areas.

• Banks has to bring out credit cards in association with fertilizer, pesticide, & seed companies

• Companies should offer discounts to Farmers for encouragement of using cards.

ANDHRA BANK

• More Off -site ATMs to be installed

• To facilitate transfer of funds,

• Payment of utility bills,

• Ordering of Agro inputs

• Banks to offer infrastucture loan products to Local people's Organizations (LPO)- Infrastucture like roads, schools, electricity, tanks, storage godowns etc.

NEW INITIATIVES

ANDHRA BANK

NEW INITIATIVES

• Rural Kiosks-access banking services through internet or cell phones.

• Marketing outlets to offer the deposit and loan products through POS (Point of Sale) terminals installed in such outlets and

connected online with the Banks.

ANDHRA BANK

NEW INITIATIVES

• Each village to identify the teachers, post offices, NGOs, VVV (Village Volunteer Vahini) Clubs, etc., to use them as Business Facilitators & Correspondents.

• Model Village Concept to be adopted by the Banks to cater the needs of all households in that village.

• Banks to establish Rural Development Institutes in the Districts through out

the country to give capacity building trainings.

ANDHRA BANK

THANK YOU

banking in the hinterland by mathew joseph asst general manager andhra bank head office::hyderabad a...

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