Post on 10-Apr-2015
RURAL BANKING
PRESENTED BY ANUPAMA MUKHERJEE
ARCHISHA GARG
The future lies with those companies who see the poor as their customers” ~C.K.Prahalad
WHAT IS RURAL BANKING ?
It is a form of banking service that provide solution to the financial needs of the consumers in Rural areas
Objectives Of Banking Services In Rural Areas
Poverty Alleviation Objectives:
The objectives is to uplift the mass of population residing in the rural areas who are currently below the poverty line by extending credit to the smallest-scale economic activity.
Financial Intermediation Objectives:
The approach involves increasing the accessibility of banking services to the poor in a commercially sustainable manner.
Business of a rural bank
The granting of loans and advances, particularly to small and marginal farmers and agricultural laborers, whether individual or in groups and to co-operatives societies
The granting of loans and advances, particularly to artisans, small entrepreneurs and persons of small means
Initiatives for rural banking development
Haryana State Cooperative Apex Bank Limited
NABARD United Bank of India Syndicate Bank Co-operative bank
Regional Rural Banks
The Narasimham committee on rural credit recommended the establishment of Regional Rural Banks (RRBs).
Government passed the Regional Rural Banks Act, 1976.
The main objective of RRBs is to provide credit and other facilities to the small and marginal farmers, agricultural labourers and small entrepreneurs and develop agriculture, trade, commerce, industry and other productive activities in the rural areas.
Objectives Of regional rural banks
Bridging the credit gap in rural areas. Check the outflow of rural deposits to
urban areas. Reduce regional imbalances and
increase rural employment generation
Establishment of nabard National Bank for Agricultural and Rural
Development was established in July 1982.
The main aim was to provide credit facilities to the farmers through co-operatives & regional rural banks.
They were responsible for all matters concerning policy , planning & operations in the field of credit for agricultural & other economic activities in the rural areas.
Rural Banking After Independence
Pre-Nationalization period The presence of banking sector was very limited. In 1951 informal credit accounted 70% of rural
lending and less than 1% of rural household debt came from commercial bank.
Nationalization of banks 14 Largest Indian commercial banks were
nationalized in 1969. The central aim was to provide the banking
services to all sections of society.
Role of rbi in rural credit
Micro–Finance Kisan Credit Card Agricultural Insurance Marketing of Mutual Fund Units
Mobile banking
Mobile banking is not only helping the government to take a step forward towards fulfilling its aim of having one bank account for every household, but also saving it crores of rupees by way of reduced transaction costs.
While the government incurs a transaction cost of Rs 12-13 for every Rs 100 it shells out, mobile banking helps it reduce the cost to a mere Rs 2.
Mobile banking
The mobile acts as a branch of the bank by storing a database of customers. It has a smartcard, which biometrically stores the identity of the customer such as name, address, photograph and relevant details of the savings or loan accounts held by the issuing bank.
Customers get a secure electronic identity via phone or smartcard, while agents take deposits and dispense cash.
System Design
Interface Server
Bank Server
Wap Request
Wap Response
HTTPrequest
HTTPresponse
update
search
DatabaseServer
DatabaseServer
search
update
challenges in marketing of banking services in rural
market
Lack of adequate financial market.Low value of loans for poor sections.Lack of collateral.Low density of population.Underdevelopment of rural infrastructure.Lack of financial discipline.Rural interest subsidy
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