Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast of financial exclusion where those services are not available or affordable. An estimated 2.5 billion working-age adults globally have no access to the types of formal financial services delivered by regulated financial institutions.
We at Punjab & Sind Bank believe that providing banking services to the poor is a viable and significant business opportunity and we are one of the few banks where the Financial Inclusion Plan has been integrated with the normal Business Plan of the bank for the past over 3 years. We have significant mix of products for serving the benefits of underprivileged and weaker section of society.
The literary meaning of Financial Inclusion (FI) can be simply stated as, 'Everybody having access to financial services'. It can be explained as every eligible citizen of the country who have been till date were left aloof of formal financial institutions being tagged as un-bankable, having a bank account in his/her name wherein he/she can avail of all the possible financial services as per the need and availability of such services in order to help every citizen being better off from the financial side.
Bank's FI Vision :-
We are committed to provide formal banking services with firm dedication to unbanked and unprivileged at an affordable cost to improve their quality of life and provide them formal banking avenue to provide opportunity for saving, Credit, Micro insurance and Pension.
Bank's FI Mission :-
To cover 2716 unbanked villages across India by enrolling all the customers through Bio-Metric Card/Card less technology under one of the coveted projects 'Financial Inclusion' by the year 2016 and to provide banking access to all those, who were deprived of these services till date and are not part of these allotted villages
The scope of FI is as high as the Sky, and has two forms of measurement. First is 'the business ' and the second is 'the necessity for making the growth of the country real and inclusive with underprivileged and unbanked population of country' both of which can be justified by this staggering fact : about 60% of not only rural but semi-urban and urban population of the 1.2 billion Indian population which is spread in every part and corner of the country, not only in the six lacs plus villages but also in the slums of metro-cities and towns, are still unreached/unbanked i.e. they do not have access to financial services from formal financial institutions. The task seems to be a daunting one but the remarkable success Punjab & Sind Bank have made in terms of covering 1.2 lakh customers under the Bio-Metric Smart Card/Card less technology just within 3 years of the start of its FI drive signifies that the FI vision of the bank can be turned into a reality and it will surely achieve its mission overcoming all obstacles in its path of just not growing the bank but making 'Inclusive financial growth' and development of the 'every individual of india'.
Model For Financial Inclusion
Following models have been adopted for coverage of FI villages.
1. BC Model
Bank has made tie-up arrangement with Our Technology Service Provider for providing End to End solution for Financial Inclusion project for coverage of FI villages, Customers are enrolled with biometric and provided smart card for operations.
Services offered through BC Model are.
a. Opening of Small saving banks account.
b. Cash Deposit.
c. Cash Withdrawal.
d. Fund Transfer.
e. Balance Inquiry.
f. Mini Statement.
Total villages covered are 946 and numbers of accounts opened are 122569
2. USB Branches-
The USB branches areset up between the base branch and Business Correspondent’s (BC) location to provide support to about 8-10 units within a three to four kilometer radius. The branch office will operate in an area of 200-400 square feet and infrastructure such as a core banking solution terminal linked to a passbook printer and a safe for cash retention to operate larger customer transactions.
“Business Correspondents can also operate from ultra small branches as their association will increase their legitimacy and credibility in the area and give people increased confidence to use their services”
40 Brick and Motor Ultra small branches have been opened by the bank during 2013-14 in the unbanked villages with population of less than 2000. Further bank endeavors to open at least 80 or more such USB branches in the unbanked villages in next 2 years i.e. upto. March 2016.
Services offered through USB Branches are.
1. Opening of saving bank account.
2. Various types of loan facilities as per products of the bank.
3. Term deposits and Recurring deposit facilities.
4. All other banking facilities.
3. Kiosk Banking-
Kiosk banking solution is web based solution operated through Bank/CSC BC through a fixed location and provides basic banking services to unbanked villages as well as services can be provided to Urban / Metro customers where formal banking services are not available at door step.
Services offered through Kiosk Banking solution.
1. Cash Deposit.
2. Cash Withdrawal.
3. Balance inquiry.
4. Mini Statement.
5. Fund transfer to another PSB account holder to any other location.
6. Loan disbursement.
Benefits of Kiosk Banking solution.
1. “No Frill” accounts are opened through Kiosk banking solution.
2. No signature is required. Only electronic thumb impression is used to access/use the account.
3. Customers also get benefits from long banking hours. (As long as the shop/Kiosk is open).
Products for financial Inclusion:-
1. SBFIN/ BSBDA accounts.
Accounts can be opened with relaxed KYC norms
a. Total credits in such accounts should not exceed one lakh rupees in a year.
b. Maximum balance in the account should not exceed fifty thousand rupees at any time.
c. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees per day.
d. Foreign remittances cannot be credited in Small Accounts without completing normal KYC formalities Total number of BSBDA accounts upto may 2014 are 12.37 lakhs with 60.76 Cr deposit
2. General Credit Card (GCC)
Low income Indian households in the informal or subsistence economy often have to borrow from friends,family or moneylenders.They have little awareness and practically no access to banking formal systems that could protect their financial resources in unexpected circumstances such as illness,property damage or death of primary breadwinner.
Eligibilty: Individual customers with regular source of income in rural and semi-urban areas.
Purpose of Limit: The applicant is eligible for availment of credit facilities as per the requirement.
Area of Operation: The scheme is to be implemented by all rural and semi-urban branches.
Nature of facility: The credit facility extended under the scheme will be in nature of revolving credit through overdraft account.
Quantum of limit: The maximum advance under General Credit card scheme is Rs 25000/=
Rate of Interest: Base Rate+ 0.50%
Repayment: Limit shall be repayable in 12 months.
Security: No security is to be insisted.
Services offered for Financial Inclusion as Corporate Social Responsibility (CSR)
1. Rural Self Employment Training Institute
Our Bank has three RSETIs at Moga, Faridkot and Ludhiana, established under the aegis of Bank’s Trust i.e. PSB Trust for Development of Agriculture and Rural Employment (PSB Trust for DARE).
RSETI building at Moga and Faridkot respectively is likely to be completed soon. Construction work of RSETI Building Ludhiana is going to started very soon.
Ministry of Rural Development, GoI has always been appreciative of Bank’s efforts in strengthening the RSETI movement. Bank has provided buses to each RSETI and Bolreo jeep to its Directors. In its grading exercise as on 31.03.2013, MoRD has rated our RSETIs at Moga, Faridkot and Ludhiana at AA, AB and BA respectively. With this rating, our RSETIs have become eligible for claiming all the training expenses for BPL youth from MoRD, Government of India. Every year PSB Trust for DARE bears training expenses to the tune of approximately 15 lac in RSETIs which is increasing by each year. RSETI Moga with AA grading has been recognized in a glittering function at Vigyan Bhawan, New Delhi on 21.11.2013 by Hon’ble Minister of Rural Development Sh. Jai Ram Ramesh.
2. Financial Literacy & Credit Counselling Centres (FLCCs)
With a view to spread financial literacy among people, Financial Literacy and Credit Counselling Centres (FLCCs) have been opened at District level. Presently, our bank has FLCCs at Ludhiana, Faridkot and Moga where we are Lead Bank.RBI and SLBC monitor their performance on quarterly basis. The broad objective of the FLCCs is to provide free financial literacy/education and credit counseling to people in rural and urban areas with regard to various financial products and services available from the formal financial sector.
FLCCs also help borrowers in distress by formulating their debt restructuring plans and recommend the same to formal financial institutions.FLCCs ,however, do not act as investment advice centres /marketing centres for products of any particular bank/banks. Counsellors refrain from marketing / providing advice regarding investment in insurance policies, investment in securities, value of securities, purchase/ sale of securities, etc., or promoting investments only in bank’s own products.
With a view to percolate financial literacy to rural areas, our Bank has decided to open FLCCs at two blocks in each District where we are Lead Bank.
Punjab & Sind Bank New initiatives for financial Inclusion
New Products and Services through BC MODEL
1. Opening of NPS Accounts.
2. Loan sourced resulting in sanction and disbursal.
3. Promotion and nurturing SHG / Joint Liability Groups.