Q.1. What is Financial Inclusion?
Ans. Financial Inclusion is the process of ensuring access to mainstream financial services and timely and adequate credit to all excluded people vulnerable groups such as weaker sections and low income groups at an affordable cost.
Q.2. Why should we have Financial Inclusion?
Ans. Major sections of the Indian Economy do not have access to formal banking services. To bring them under the banking purview and provide them banking facilities. Financial inclusion initiatives were under taken since 2005-06.
Bring the excluded section of the Society within the banking purview would enable banks as financial intermediaries to contribute to economic growth through mobilization and allocation of credits towards various project financing, thereby providing households, businesses to attain their economic goal.
Q.3. What are the challenges of Financial Inclusion?
The challenges of Financial Inclusion -
- Poor infrastructure and telecom connectivity in rural areas
- Lack of financial literacy
- Availability of required documents for banking activities
- Limited technology adoption and know-how among the ecosystem partners
- Lack of local support for scalability of banking services
Q.4. What is saving?
When income is more than expenses, then we have surplus money known as savings.
Q.5. Why should one save?
We should save regularly so that it can be used to meet expenses / exigencies for education, marriage, purchasing farm seeds, purchasing own house, birth, illness, accident, death, natural calamity, old age, etc. During the emergencies only savings could help.
Q.6. Where to Save?
The money is mainly kept at home in the Gu1lak. But we would always be worried about its safety. Sometime it may get stolen or we may be tempted to use the money. Also money saved at home does not increase.
Thus the money could be saved in a bank.
Q.7. Why save in a bank?
Ans.Money kept in a bank is safe, secure and trusted upon.
Q.8. What are the advantages of having a bank account?
Ans.One can open savings, recurring / fixed deposit accounts. Banks offer loans and many other useful services. The wages / salary drawn can be directly credited to the bank account. All social benefits like MGNREGA wages, pensions, etc. can be directly credited to bank account through EBT. The money kept with the bank can be deposited or withdrawn at convenience. Banks do not charge any fee for depositing money but pays interest on the money deposited.
Besides a bank account gives us an identity which is recognized by other government agencies.
The interest charged by the bank is much less than the interest charged by the money lender (Sahukar).
Q.9. What is a BSBDA Account?
Ans.A BSBDA account is Basic Savings Bank Deposit Account which can be opened with simplified KYC document and also with nil balance.
Q.10. What are the features of a BSBDA ?
Ans.Basic Savings Bank Deposit Account is opened on the basis of simplified KYC norms. Banks would not charge fee for deposit of money any number of times. In addition, banks would not charge for 4 withdrawals during a month. The customer would be provided with a Passbook and an ATM card without any fee. The account can be used for day to day needs like deposit, withdrawal, remittances, direct credit of social benefits, etc.
Q.11. What is Financial Planning?
Ans.Financial Planning is to help individuals to use their resources against the needs efficiently in short term and achieve their long-term financial goals through investment, asset allocation, risk management, retirement planning, etc.
Q.12. How does it help the customer ?
Ans.It will help the customer to manage his financial resources as well as to know the different avenues of investments, liquidity preference, risk tolerance level vis-Ã -vis risk mitigation etc. to reach the financial goal.
Q.13. What are the types of loans offered by the banks?
Ans.Banks give various types of loans such as short term loans, long term loans, overdrafts and working capital etc. for agriculture and allied activities, business, manufacturing units , personal loan, housing loans, education loans, business loans, etc. to meet the requirements of the customers.
Q.14. Why should we repay the loan?
Ans.The banks use depositors' money for lending. If the loan is not repaid, it would affect the bank's capacity to repay the depositors' money in time. This would also affect the banks capacity to lend to borrowers. In case the loans are not repaid on time bank could take possession of the security offered as guarantee for the loan and can initiate legal proceedings for recovering the loan amount along with the interest.
Q.15. What is SSA?
Ans.SSA is a Sub Service Area under Lead bank scheme Service Area Approach under which villages are identified and assigned to bank branches based on their proximity and contiguity.Sub Service Area is a cluster of more than one village wherein up to 1000 to 1500 households are brought under such cluster for providing banking services.
Q.16. What would be the features of the accounts opened?
Ans.Savings Bank accounts with zero balance would be opened and ATM/Debit (RuPay) cards would be issued to the account holder.
Q.17. What are the requirements for providing Basic Banking Accounts at household level?
Ans.For every uncovered household, it is required to open one accounts in every household fulfilling the basic KYC requirements.
Q.18. What is a Business Correspondents (BC)?
Ans.Business Correspondents are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. Basically, BCs enable a bank to expand its outreach and offer limited range of banking services at low cost. BCs, are an integral part of a business strategy for achieving greater financial inclusion.
Q.19. What are the functions of BC ?
Ans.BCs are permitted to perform a variety of activities which include identification of borrowers, attend to collection of small value deposit, disbursal of small value credit, recovery of principal / collection of interest, sale of micro insurance/ mutual fund products/ pension products/ other third party products and receipt and delivery of small value remittances/ other payment instruments, creating awareness about savings and other products, education and advice on managing money and debt counseling, etc.
Q.20. What are the products offered through the BC channel?
The following products are offered through the BC Channel -
- Small Savings Accounts
- Fixed Deposit and Recurring Deposit with low minimum deposits
- Remittance to any BC customer
- Micro Credit
- General Insurance