Financial Inclusion



Recent developments in Information technology has transformed banking from the traditional brick-and-mortar model to sleek, easy and Anytime, Anyhow, Anywhere banking supported by a number of innovative systems such as Automated Teller Machines (ATM), cashless banking through plastic money, Internet Banking, mobile banking, online money transfers, etc. But technology is expensive and, therefore, is till now restricted to urban population who can afford its cost. Whatever has so far reached to rural population is meager, to say the least. In the new millennium, India has witnessed tremendous growth in communication technology. Notwithstanding the global meltdown in the last couple of years, this sector has grown tremendously with the result that now communication has made inroad in urban and semi urban areas and is set to cover more and more new areas. With such expansion, it has also become affordable. With this growth, a new channel of reaching the masses has opened up.

Financial inclusion initiatives, driven by a combination of technology and communication, has proved tremendous success in the pilot implementation. Instead of a person reaching the Bank branch, now Bank shall reach the doorstep of customer in this Govt. initiated branchless banking. Certain categories of organisations / people like non-government organizations, micro-finance bodies, co-operative societies, grocery shops, Public Telephone Booth operators and individuals are appointed as business correspondent/facilitator of a commercial Bank and are authorized to collect small deposits, disburse and recover certain loans, and also sell other financial products, like insurance, pension and mutual funds, and to handle small remittances and payments through smart card based bio-metric enabled transactions either online or through offline. This is a cost effective scheme with low investment and, therefore, it is planned to cover entire population in the years to come. Extending banking channel to entire population is good step. However, there is a need to sit and review in retrospect whether we are really catering to the needs of the deprived class, whether the services and products that we offer to urban population also suits them, whether the present rules and regulations, including statutory ones adequately address their needs also. Not everybody can start his own business and earn a sustainable income. Just extending a credit facility of even a small amount for such people may not be fruitful. Still we should extend credit to such persons for inclusive growth. We need to innovate different products or a package of products that meet saving, credit and insurance needs of the people. In fact, savings products must meet the specific requirements of the poor. Where is the question of savings when the poor hardly earns enough to sustain a day's meal? They live by a day. Therefore, we must tap small savings in return for some incentives, other than some percentage of interest, with suitable back-end technology support. Remember, traditionally, savings has always been associated with surplus income, which the poor is not generating! We need to have a fresh thinking on savings in the context of poor when we have to include all of them in our fold.

Time has come to come up with new ways and means of offering new savings product to poor and deprived class. Similarly, for meeting credit needs, a savings-linked financing model can be adopted for these segments. The approach must be kept simple and should guarantee the beneficiaries a credit limit, subject to adherence to simple terms and conditions. Also, suitable micro-insurance products need to be developed for the financially excluded. Poor population, especially the rural population has high percentage of illiteracy. This makes them depend upon a few literates who can guide them. Therefore, while literacy rate should be increased, we also need to educate them through financial literacy and counseling centres, if we have to empower them we need to educate them. Let us teach them fishing, not feed them fish! Reaching vast millions cannot be sustained either by banks or by govt. agencies alone.

The underlying fact is that such efforts should be driven by the Govt with the active participation of Banks and support from the Industry. The industry should come out with new technological products such as very low cost hand held machines and affordable smart cards and invest more in setting up communications in the un-wired villages. The Banks should play a very active role in bringing rural population under their fold by sending their correspondents to unbanked areas. The country has taken it at top of its agenda. To set the right momentum and accelerate the coverage, there have been regulatory relaxations and initiatives such as using mobile phones for making payments and third party business correspondents and relaxing the Know Your Customer norms. The concept of branchless banking will be instrumental in speeding up financial inclusion. With increased coverage we shall definitely innovate and improve so that we achieve the desired goals in the time frame set for the same.

Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched by the Hon’ble Prime Minister on 28.08.2014 with the objective of bringing all unbanked households/families of the country into banking fold by providing them with Basic Bank Accounts, Rupay cards with accidental insurance coverage of Rs 1.00 lakh, life insurance coverage of Rs 30,000/- and overdraft facility upto Rs 5000/- based on the satisfactory transactions in the account.

Our Bank has been allotted with 1151 Sub Service Areas (SSA) comprising 3410 villages and 18 wards. Out of this, 289 SSAs (458 villages) are covered by brick and mortar branches and remaining 862 SSAs (2952 villages) are covered through Business Correspondent Agents/Bank Mitras. In addition, 20 wards in towns are also covered with Business Correspondents. Bank has conducted household survey in all allotted SSAs and Wards and covered all the households with at least one bank account.

As on 31st SEP-2016, Bank has opened 14.22 Lakh Basic Savings Bank Deposit accounts under PMJDY with a total savings of Rs. 146.01 crore and all the account holders are provided with Rupay debit cards. Aadhaar numbers have been seeded in 11.26 lakh accounts.



·         E-KYC has been enabled in all the branches and also in Hand Held Machines/Micro ATMs.

·         Automation of Overdraft facility has been enabled in all the ATMs of the Bank.

·          RuPay card Off Us transactions has been implemented at all the BCA Locations.

·         All Micro ATMs are enabled for RuPay Card transactions.

·          The percentage of Zero Balance Accounts has come down to 3.30% from a level of 54% as on 31.03.2015.

·         Average Transaction per Day per Bank Mitra has increased to 22 as compared to 6 as on 31.03.2015.

·         97% of our BCAs are getting remuneration of Rs. 5000/- and above as compared to 35% as on 31.03.2015.

·          Cash receipt to SB accounts from third parties without biometric authentication by the account holders has been enabled in all the HHMs/Kiosks



Bank authored “Vijaya Financial Literacy Trust” (VFLT) on 20-11-2015 with the objective of imparting literacy to all the Urban & Rural masses regarding financial matters. The first FLC under the new trust was opened at Gauribidanur on 26.03.2016. Presently, Bank is having a total of 15 FLCs, 13 centres in Karnataka State and 2 centres in Kerala.

To create awareness on ‘Pradhan Mantri Jan Dhan Yojana’ in Rural and Urban areas, Bank has prepared an Audio Film in regional languages for screening at account opening camps and other literacy programmes. Financial literacy materials in regional languages are also provided to branches to impart financial literacy to PMJDY account holders and other rural and urban masses.


Imparting of financial literacy in schools has been introduced under School Bank Champ Project of IBA, wherein 431 schools have been mapped with branches in rural areas. Under the Pilot project of DFS, financial literacy is imparted to students in 51 schools of three states-ie Maharashtra, Madhya Pradesh and Gujarat. Bank is actively participating in promoting social security schemes such as Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Atal Pension Yojana (APY). Our FLCs are also participating in Finanacial literacy camps at ITI s and Skill centers.




Bank is actively implementing the modified DBTL programme of the Govt. of India, by seeding Aadhaar number of LPG consumers into their accounts.  SMS alerts are also sent to all the customers regularly for seeding Aadhaar numbers into their accounts through various modes.




Bank is disbursing Social Security Pensions / MNREGA amounting to more than Rs 8.00 Crore per month to more than two lakh beneficiaries in Mandya District through Bank Mitrs under “one district one Bank Model” scheme.


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