Ad Here  
March
April
May
June
July
August
 
 
Who is the real beneficiary? Another route for achieving financial inclusion Grows Bigger LVB- A supermarket of financial services Ferrying digital banking to Lakshadweep Anytime banking to anywhere banking Stage set for Indian ‘avatar’ of foreign banks Nothing much can happen…. Fund healthcare clinics in villages... Greet Lakshmi the banking robot Cradle of banks to a smart city... Governance in Reverse Gear? Drastic decline in asset quality Emerging crisis Financial inclusion vs unclaimed deposits The paradox: clamour for the Goliath and David Thirty more cities seek to become SMART New bank licences, at last... Good, bad and ugly Banking overhauling or reorganisation? Aadhaar, niraadhaar and banking Holy or unholy? Small finance payment banks... Small is ‘more’ beautiful Hesitancy in announcing year-end results From lazy banking to easy banking How ‘secure’ are the secured loans? A bank for women, by women A development bank for BRICS All that glitters is not gold... Targets continue to be ad hoc Perhaps small is more beautiful than big! Growing gainfully Insatiable appetite for credit Banking in Telangana Just 660 days! Target over-ambitious... Smart banking in smart cities Big bank merger, bigger expectations Rationalised Mega merger is on It’s a war on black money, support it. Monetary policy continues to adopt dis-inflationary path Payment banks have arrived Needed a Banking Atlas Ernakulam excels... Lacklustre credit expansion Managing NPAs... Merger mania haunts banks One down in private sector Drop in SLR- sparing lendable resources United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Indian customers are tech savvy Bank deposits account for 46.3 per cent of household savings Reaching out: is it slowing down? New capitals of Migrant banks Cautious and considerate Bottomlines shrink, bad loans rise... Well-lived... Cut in repo rate – lower than expected Too big to fail and too small to sail Banking on Risk How okay are new banks? Growing volume of stressed assets… Capital base of regional rural banks raised What is the priority – mergers or NPA reduction? Two banks: their jubilees and performances The collaboration suite of cyber criminals Small finance banks offer high interest rates Why any time money? Reaching the Unreached… Why priority status? A new development bank rising in the east…
 
Financial inclusion vs unclaimed deposits
Ever since the banks in India were directed to adopt strategies for reaching out to the unreached, banks have embarked upon adopting multi-channel approaches to extend banking facilities.

‘No frills account’ is an invention extensively used to increase the number of deposit accounts even without securing new deposits. Zero balance accounts were offered to bring to the banking fold the poor and illiterate folks all over the country.

 

Attaining financial inclusion

For reaching out to people in unbanked villages, branches are being opened by the public sector banks. During the last financial year, 3087 rural branches were opened. Branchless banking model has attracted the attention of bankers as a cost-effective means for reaching out to the unreached households.  The progress made by banks in setting up the branchless banking centres in villages through the appointment of Business Correspondents (BC) is quite impressive.  In the non-rural sector, 27,143 BCs have been appointed. The number of ATMs is on the increase in the urban sector.

 

Deposit mobilisation:

Mobilisation of deposits, by inculcating saving habits among the rural households, is the major component of the mechanism of financial inclusion. Extending credit facilities is the next step. The introduction to banking practices begins with the opening of savings bank deposits. Spreading financial literacy is a major task the banks have to undertake. For this purpose 718 Financial Literacy Centres have been opened  in most of the districts by the lead banks which are  taking the responsibility of  running them.

Savings bank deposits are mostly held by the salaried class and other individuals by availing themselves of the banking facilities. . The Self Help Groups (SHG) are the latest entrants into the realm of savings deposits. The number of accounts is on the increase because of the proliferation of SHGs. In fact, this is the segment where the real financial inclusion is taking place as women in groups are brought to the banking sector to become both depositors and borrowers. Schools, social clubs, professional and petty merchants also have SB accounts.

 

Unclaimed deposits:

With the rapid increase in the deposit accounts, the unclaimed deposit accounts also grow.  Death, migration, loss of income or loss of evidence of having an account could be the reasons. According to the Reserve Bank of India guidelines, the banks are required to display on their websites the list of unclaimed deposits and inoperative accounts with a view to enabling the public to search the list by name of the account.  

The total number of unclaimed deposit accounts with the banking sector is 112.50 lakh and the amount involved is Rs.2481.40 crore as on 31 March 2011. Around 15 years ago, the amount of unclaimed savings bank deposits was Rs.222.79 crore and the number of accounts was 96.71 lakh. (“Unclaimed Bank Deposits: Can’t rest in peace” in Industrial Economist, 30 October, 1998). Though there is an increase in the total amount, it is not alarming.

The amount involved in individual accounts being very small, the losers may be the people with  meagre incomes. It also includes small amounts of savings some SHGs have pooled together which are lying in banks as unclaimed deposits.  Gramin banks also have their own share of unclaimed deposits.  

The  list of unclaimed deposits of a gramin bank in north India, which had 19,531 such accounts, showed  that all types of depositors were listed, including primary schools, girls’ high schools, village panchayat offices, gram sarpanchs, village-level heads of small government departments, housewives and also a good number of SHGs. In a few cases, the SHGs were having more than one account. Such cases have negative implications for financial inclusion.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com