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APROJECT REPORT ON
FINANCIAL INCLUSION:A STUDY OF TAKING BANKINGSERVICES TO THE RURAL POPULATION
DEVELOPED FOR PREPARED BYRIDDHI BHATIA(11047)MBA BATCH 2010-2012
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Founded:In 1985 as Kotak Capital Management Finance
Ltd. by Mr. Uday Kotak and Sidney A.A. Pinto.
IndustrialistsHarish Mahindra and Anand Mahindratook a stake in 1986, and that is when the company's
name was changed toKotak Mahindra Finance Limited.
In February 2003, company was given the license to
carry on banking business bythe Reserve Bank of India
(RBI).
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Delivery of financial services at affordablecosts to sections of disadvantage and lowincome segments of society.
Financial Exclusion one major factor.
FI is essential for overall economic growth.
Key Focus: A Pure savings product with inbuilt overdraft facility
A recurring deposit product A remittance product
Entrepreneurship credit in the form of KCC/GCC
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Extending formal banking system among lessprivileged in urban & rural India.
Weaning them away from unorganized moneymarkets and moneylenders.
Equipping them with the confidence to make
informed financial decisions.
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To know the priority of existing customers ofbanking sector.
To know the satisfaction of existingcustomers of banking sector.
To know the financial literacy of the people.
To understand various aspects of financialinclusion.
To analyse the initiatives to be implementedto achieve financial inclusion.
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Exploratory type of research Sample Size: 1000 (specified by the bank)
Primary data collection : Questionnaires
Secondary data collection
Area sampling used suggested by the bank ( inand around Ahmedabad)
Areas covered: Dudeshwar, Bapunagar, Vadaj,Kalupur, Naroda, ThaltejGam, Rakhial, Asarva,Meghaninagar, Vatva, Sabarmati, Changodar,Kadi, Viramgham, Visnagar, Mehsana, Nadiad,Baroda, Bhayali, Padra, Por, Halol, Dahod, Rajkot
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Relaxation of Know Your Customer (KYC)guideline for No-Frill accounts.
Introduction of Business Correspondent (BC)Model for service delivery in remote areas.
Financial Literacy and Credit Counseling(FLCC)
Setting up of RUDSETIs
Establishment of FIF and FITF
Financial Empowerment through Mobilephones
Swabhimaan
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More than 54,000 No frills accounts openedunder FI initiative.
Started its ICT based FI Initiative at MehsanaDistrict,Gujarat.
Covered 30 villages by opening rural bankbranches and 245 villages by engagingBusiness Correspondents.
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Easy Savings Account offered through bankbranches (No frills) Initial Deposit: Rs. 100/-
AQB: Rs. 100/-
Free: Replacement of damaged card,Internet bankingfacility,Bank statement,Pass Book
Etc.
Easy Savings Account offered through BusinessCorrespondents (No frills) Initial Deposit: Rs. 100/-
AQB: NIL
Free: Account Opening,Cash Deposit
Etc.
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Khan Commission 2004 Featured in Pondicherry by K C Chakraborthy, the
chairman of Indian Bank.
No frills account
KYC norms relaxed (annual deposits < Rs.50,000) Issuance of GCC
NGOs and other intermediaries
RBIs vision by 2020 : to open nearly 600
million new customers' accounts and servicethem through a variety of channels byleveraging on IT.
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7
84
82
71
54
55
5
3
5
6
0 10 20 30 40 50 60 70 80 90
no answer
car loan
personal loan
home loan
loan against
property
loan against gold
working capital
loan against shares
loan against lic
agri finance
Series1
AWARENESS OF BANKING FACILITIES
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89
4
4
3
2
1
1
1
0
2
0 10 20 30 40 50 60 70 80 90 100
no answer
car loan
personal loan
home loan
loan against property
loan against gold
working capital
loan against shares
loan against lic
agri finance
Series1
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14
62
6540
54
7
65
54
13
36
11
8
17
11
6
0 10 20 30 40 50 60 70
no answer
term life insurance
permanent life insurancemoney back
pension
endowment
health
fire
marine
motor
theft
shop accident
home
travel
machinery
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70
9
12
2
0
0
12
2
0
6
1
0
0
0
0
0 10 20 30 40 50 60 70 80
no answer
term life insurance
permanent life insurance
money back
pension
endowment
health
fire
marine
motor
theft
shop accident
home
travel
machinery
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24%
25%
51%
AWARE ABOUT MOBILE BANKING
yes
no
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205
31
4
14
126
17
9
12
0 50 100 150 200 250
saving a/c
current a/c
recuring a/c
fixed deposit a/c
Outside A'bad Ahmedabad
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Products
Processes
Technology People
Outreach
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Financial illiteracy Low and cyclical income
Minimal collateral
Lack of credit history Absence of formal and verifiable identity
General illiteracy
Apprehension of bureaucracy social
oppression Credit primarily for personal consumption
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Appropriate products
Financial counseling
Increased accessibility
Simplified procedures
Improved public interface
Leverage modern technologies
Provide information in local languages Lower transaction costs
Educate youth in rural areas
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Main barriers from customers side: Lack of awareness of financial services
Social exclusion
Unsuitable products
Unfriendly and distant behavior by the bank staff Exorbitant & non-transparent fees
Terms & conditions
Main barriers from implementer's side:
Lack of communication Language barrier
Cost of infrastructure, technology, etc. leading tohigh costs.
Products
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