ERNAKULAM DISTRICT, with its 96 per cent literacy (Census 2011) has another feather to its cap; has one of the most favourable population-bank branch ratios. The population per branch in the district is 4420 as against the national average of 13,100.
Meaningful financial inclusion
Achieving total financial inclusion is not an end in itself. It is one of the positive steps to reach out to the unreached for facilitating inclusive development. To be functionally more meaningful, contours of financial inclusion should include easy access to banking facilities to all the households in every village. Union Bank of India, the lead bank of Ernakulam district, has begun the process by selecting Vengoor village and has specified the objectives of financial inclusion to ensure that:
• Each household is having an operating account through which regular transactions take place;
• Each needy household is provided with credit facilities by the banking sector;
• Each needy household is provided with fund transfer facilities through banks;
• Each needy household is provided with micro insurance facilities.
According to Census 2011, the population of Ernakulam district has increased to 32.80 lakh (31.06 lakh in 2001). During this decade, the total number of deposit accounts handled by banks in the district has gone up to 52.11 lakh, up from 27.04 lakh in 2001. There has been an unprecedented expansion in the deposit accounts. When the total population has increased by 1.74 lakh, the number of deposit accounts has risen by 25.07 lakh. Based on the magnitudes of these numbers, it is possible to infer that the banks have reached the entire population of the district. Obviously, many persons would be having more than one deposit account.
Increase in the number of borrowing accounts is, however, not as impressive as that of deposit accounts. They have increased only marginally; increasing from 6.08 lakh to 6.97 lakh as on March 2010, the latest available data.
The contributing factors
There are a few factors that have contributed to the district’s achievement as the first district to achieve meaningful financial inclusion. The spurt in branch expansion during the last decade is one of the major factors, taking banking nearer to the people. The number of branches has increased from 503 in 2001 to 742 in 2011, reducing the per branch population substantially.
The demographic features of the district is the second factor. Urban population out-number rural population significantly. Kochi urban agglomeration alone has a population of 21.18 lakh. Kothamangalam agglomeration has another 1.14 lakh population. Over 68 per cent of the population of the district being urban, accessibility to banks is much better than that of many other districts.
High literacy rate – 96 per cent – is the third major factor facilitating the financial inclusion.
The existence of banking facilities in the district since long is also a contributing factor in spreading awareness of banking services. Kochi had a branch of Bank of Madras since May 1862. A number of local banks were operating in this port town since the 1920s. Bank of Cochin Ltd was operating here since 1928 until it was merged with State Bank of India in 1985. Cochin Commercial Bank Ltd was functioning since 1936 until it was merged with Canara Bank in 1963. In addition, the branches of other Kerala-originating banks like Catholic Syrian Bank Ltd, Palai Central Bank Ltd and South Indian Bank Ltd also had their branches. Aluwa is the other important banking centre in Ernakulam district, where Federal Bank Ltd, the biggest bank among the old generation banks in the private sector, is operating since 1947.
Kochi ranking 20th among the top 100 banking centres in India makes its own contribution to boosting
the number of deposit accounts of Ernakulam district. In credit deployment, its rank is still better at 12th