1. Banking
on Inclusion !
The southern States race past others in financial
inclusion, finds a CRISIL report….
i. With nearly twice of the
all-India average in credit penetration, the four southern States are presently leading the financial inclusion
drive in the country.
ii. A new index on
financial inclusion released by ratings firm CRISIL (Credit Rating Information
Services of India Limited) reveals that the number of loan accounts per
lakh of population in the southern States stands at 17,142.
iii. However, this healthy
figure can be easily offset by the under-penetration of formal banking
facilities in most parts of the country just one in two Indians has a savings
account, and only one in seven Indians have access to banking credit!
iv. Moreover, the bottom
50 scoring districts have just two per cent of the country’s bank branches.
v. The index measures financial inclusion on a scale of 1 to 100, with 100
signalling that an entire population has access to banking services.
vi. The report
states that developed states like Gujarat and Maharashtra lag behind the
national average of 40.1 when it comes to financial inclusion; ultimately
resulting in a loss to the Indian GDP of nearly one per cent due to lack of
financial inclusion.
vii. The southern region
has raced ahead across all three dimensions of financial inclusion — branch
penetration, deposit penetration, and credit penetration
viii. CRISIL used bank
branch, credit and deposit penetration (per lakh population) to assign scores
to each district and then arrived at a score for every State and Union
Territory.
Why Southern States
are leading the financial inclusion drive in the country?
i. “The governments of
the southern States ensured financial inclusion through adopting e-governance and electronic transfer of
welfare payments.
ii. Higher levels of
literacy in these States have also led to easier adoption and better awareness
about banking services.
iii. Higher number of
bank branches has played its role in increasing the reach,”
explains Mujahid Ahsan, Vice President (Products), FINO PayTech Limited.
FINO PayTech is an
implementing agency that works with banking and microfinance institutions to
provide the last-mile connectivity through Banking Correspondents (BC).
NOTE: i. According to the
CRISIL report, six of the 10 most inclusive States and Union Territories are in
the south.
ii. Puducherry is on the
top with a score of 79.6. Chandigarh in the north and Goa in the west are
also in the top 10.
iii. The bottom five
includes Arunachal Pradesh, Chhattisgarh, Bihar, Nagaland, and Manipur, the
lowest with a rating of 16.6.
iv. “Financial inclusion…
is not just about opening of saving bank accounts; it includes creation of
awareness about financial products, and offering of advice on money management
and debt counselling,
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