Financial Literacy Inclusion The Indian Way BIPIN NAIR

Financial Literacy & Inclusion - The Indian Way BIPIN NAIR ASSISTANT GENERAL MANAGER RURAL PLANNING & CREDIT DEPARTMENT AFI GPF Mexico 2011

India- Some facts Geographical area - 7 th largest in the world - Population - 2 nd in the world– 1. 2 billion 28 States and 7 Union Territories - 625 districts 600 thousand villages in India. However, only 33495 villages had a bank branch One branch per 14, 000 population - 55 % have deposit accounts & 9 % credit accounts AFI GPF Mexico 2011 Multilingual and multiethnic society - High poverty & Illiteracy - Dependence on informal sources of finance

Policy Initiatives § Bank led model adopted to achieve planned, sustained and structured financial inclusion § Banks mandated to provide access to financial services in nearly 74000 villages with population over 2000 by March 2012. § Three year Board Approved Financial Inclusion Plan by banks to be rolled out by March 2013 for extending financial unbanked villages. § Business Correspondent/ Business Facilitator Model - Availability of Door -Step banking services to all 600 thousand villages in the country- Next 35 years § Regulatory norms on KYC relaxed. § Simplified branch authorisation. Mandatory opening of 25 % of new branches by banks in unbanked rural centers. § Include criteria regarding Financial Literacy and Inclusion in performance evaluation of the staff. § Availability of minimum four banking products under Financial Inclusion is being ensured. AFI GPF Mexico 2011

Policy Initiatives • Nearly 250 Outreach Programs involving participation of senior executives from RBI conducted across the country. • Nearly 200 remote unbanked villages adopted by RBI for transformation into model villages characterized by 100% financial inclusion. • State Governments to include Financial Literacy as part of the school curriculum. • Issuance of unique identification numbers (AADHAR) to beneficiaries for rolling out social security payments through the banking channel. AFI GPF Mexico 2011

Project Financial Literacy AFI GPF Mexico 2011

ACHIEVEMENTS under FINANCIAL INCLUSION • Total Number of villages covered 99840 • Villages covered through branches 22684 • Villages covered through BCs 76801 • Villages covered through other modes 355 • Number of No Frill Accounts 74. 39 mio • Number of Agricultural Credit Cards 22. 49 mio • Number of General Credit Cards AFI GPF Mexico 2011 0. 95 mio

Way Forward Coordinated National Strategy § The key is establishing an appropriate Business Delivery Model through the involvement of all stakeholders to make Financial Inclusion a reality. § A National Level Strategy for Financial Literacy is the need of the hour. § Coordination with Central and State Governments as well as with Global Organisations. AFI GPF Mexico 2011

Thank you. bipinnair@rbi. org. in AFI GPF Mexico 2011