1. A study on the effectiveness of the Financial
Inclusion program in Jammu and Kashmir:
Initiatives by the major banks
Presentation by:
Suhail Qasim Mir
MBA Student, CMS,
JAMIA MILLIA ISLAMIA
International Conference on:
“Modern Strategies for Management of Business, Economy, Services vis a- vis-
Social Sciences- A Sustainable Approach”
(MSMBESSA - 2014)
“Jawaharlal Nehru University, New Delhi”
Copyright Suhail Qasim Mir 2014

2. What numbers say?
Extent of Financial Exclusion-Global
2.5 billion adults, just over half of world’s adult
population, do not use formal financial services to save
or borrow.
2.2 billion of these unserved adults live in Africa,Asia,
Latin America, and the Middle East.
Of the 1.2 billion adults who use formal financial
services in Africa,Asia, and the Middle East, at least two-
thirds, a little more than 800 million live on less than $5
per day.
Not an Indian specific problem but a global one
Copyright Suhail Qasim Mir 2014

3. Extent of Financial Exclusion-India
In India, almost half the country is unbanked.
 India has the highest number of households (145 million)
excluded from Banking.
There is only one bank branch per 14,000 people.
Just 18 per cent have debit cards and less than 2 per cent have
credit cards.
Exclusion is staggering whichever parameter one chooses to
look at !
Copyright Suhail Qasim Mir 2014

4. What is Financial Inclusion?
Financial Inclusion is the process of ensuring access to
appropriate financial products and services needed by all
sections of the society in general and vulnerable groups
such as weaker sections and low income groups in
particular at an affordable cost in a fair and
transparent manner by mainstream institutional players.
In advanced economies, Financial Inclusion is more about the knowledge of
fair and transparent financial products and a focus on financial literacy.
In emerging economies, it is a question of both access to financial
products and knowledge about their fairness and transparency.
Awareness + Access = Financial Inclusion
Copyright Suhail Qasim Mir 2014

5. 5
What has been done so far…
(RBI Initiatives….)
Opening of No-Frills accounts
Relaxation on know-your-customer (KYC)
norms
Engaging business correspondents (BCs)
Financial Literacy and Credit Counseling
Centers (FLCCCs)
Use of technology
Simplified branch authorization
Opening of branches in unbanked rural
centers
Copyright Suhail Qasim Mir 2014

6. Achievements so far….
Banking connectivity has been extended to 2,11,234 villages up to
December 31, 2012 from 67,694 villages in March 2010. 5694 rural
branches have been opened.
Numbers of Business Correspondents have increased from 34,532 to
1,52,328.
1714.27 lakh Basic Savings Bank Deposit Accounts, 317.33 lakh Kisan
Credit Cards and 31.14 lakh General Credit Cards remain outstanding
as on December 31, 2012.
658 Financial Literacy Centers (FLCs) functioning as at the end of
December 2012
1.5 million people educated during the period April to December 2012
Copyright Suhail Qasim Mir 2014

7. FIP achievements
April 2010- march 2013
About 2,68,000 banking outlets opened in villages –
About 7400 rural branches opened
27143 Urban Location covered through BCs
182.06 million Basic Savings Accounts (NFAs),
out of which BC-ICT based – 81.27 million
OD facility extended in about 3.95 million Accounts
33.79 million KCCs and 3.63 million GCC accounts

8. The State of Jammu and Kashmir lags behind other states in its
vital Financial Inclusion Indicators; Credit-Deposit Ratio at a
meagre 35.71 against the benchmark 60, and Financial
Exclusion to the extent of 68% which
is highest in the Northern Region.
It has a CRISIL Inclusix score of
36.9 compared to the national
score of 42.8.
Objectives of the study:
 To examine the various financial inclusion
initiatives taken by the banking fraternity
in Jammu and Kashmir.
 To evaluate the progress and current status
of Financial Inclusion in the State.
Copyright Suhail Qasim Mir 2014

9. Banking Network in Jammu and Kashmir
Banking
Network
In the state
Public
Sector
Private
Sector
Regional
Rural
Banks
Cooperative Others
Banks 22 7 2 10 1
Branches 392 672 325 253 14
BCs 118 663 101 0 0
Banking
Parameters
(Amt in Rs
Crores)
Deposits 17489.47 4606.61 61884.53 2742.30 ……..
Advances 5124.92 17616.48 23944.88 943.21 573
CD Ratio 29.30 42.34 43.16 34.39 ……..
Copyright Suhail Qasim Mir 2014

10. Major Bank Initiatives
FINANCIAL INCLUSION PLAN:
FIP PHASE-1
 Aimed at villages having population more than 2000
 For providing banking services through various ICT-based banking outlets.
Under this 795 identified unbanked villages were identified & allocated among 5 major banks for
banking services. Out of these 795 unbanked villages 789 have been covered so far.
FIP PHASE-2:
 Aimed at villages having population less than 2000
 For providing a bank account to every household throughout the State for facilitating transfer of all
Govt. benefits including MGNREGA
Under this 5582 villages were identified & allocated among the existing 5 participating banks. Out of
these 5582 villages identified, 2331 villages have been covered upto the end of December, 2013.
KISAN CREDIT CARD SCHEME:
Upto the end of December 2013, banks have sanctioned a total number of 7, 22,212 KCCs in J&K
State, against which 5, 55,512 KCCs have been disbursed credit amounting to Rs.3,101.52 Crore.
Major contributors are J&K Bank (52%) followed by JKGB (14%) and SBI (9%)
Copyright Suhail Qasim Mir 2014

11. Initiatives Contd….
Financial Literacy Centres (FLCs): Financial Literacy Centres
(FLCs) will impart financial literacy among the people of J & K.
Rural Self-Employment Training Institutes (RSETIs): RSETIs are
to impart training and skill upgradation of rural youth geared towards
entrepreneurship development.
Other Initiatives:
 Under the Annual Credit Plan, by the end of December 2013 banks in J&K have
extended total credit of Rs 7,672.06 (both under Priority as well as Non-priority
Sector) against a target of Rs 16,322.68( Achievement of 47%)
 Branch Expansion Plan
 Electronic Benefit Transfer (EBT) scheme
 Common Service Centres
 No Frills account etc.
Copyright Suhail Qasim Mir 2014

12. Major Findings:
1. CRISIL Inclusix score of the state is 36.9 compared to the national score of 42.8.
2. In the first phase of FIP, out of 795 identified unbanked villages (having population over
2000), 789 had been already covered which is 99% of the target.
3. In the phase-2 of FIP, out of total 5582 villages (having population less than 2000) to be
covered, 2331 villages have already been covered, which is just 41% of the target.
 . 6. The activities undertaken by all the 22 FLCs (both indoor and outdoor) during the
quarter under review have facilitated credit linkage to 2565 entrepreneurs out of which
2269 entrepreneurs have established their business ventures.
 7. A total of 4,778 persons were trained in all the 22 RSETIs during first three quarters of
CFY(2013-14) as against the 4,054 persons trained during 4 quarters of the previous
financial year.
6. Out of total 227 branches to be opened, the banks in state have opened only 85 branches till
31 Dec., 2013.
Copyright Suhail Qasim Mir 2014

13. Franklin D. Roosevelt remarks, “The test of our progress is
not whether we add more to the abundance of those who
have much; it is whether we provide enough for those who
have too little.”
THANK YOU !
suhailmir24@gmail.com
Copyright Suhail Qasim Mir 2014