Background
Based on the recommendations of the Interim Report of the Committee on Financial Inclusion, headed by Dr. C. Rangarajan, Government of India has constituted two funds viz., Financial Inclusion Fund (FIF) for meeting the cost of developmental and promotional interventions of financial inclusion and Financial Inclusion Technology Fund (FITF) to meet the cost of technology adoption for financial inclusion. Each Fund consists of an overall corpus of Rs.500 crore, with initial funding to be contributed by the GoI, Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) in a ratio of 40:40:20. The funding would be contributed in a phased manner over a maximum period of five years, depending upon utilisation of funds. Depending on the outflow from the Fund, annual replenishments may be made by GoI, RBI and NABARD and from other stakeholders/institutions as may be decided by the Government. The Government of India has constituted Advisory Board for FIF and FITF consisting of members from GoI, RBI, IRDA, IDRBT, NASSCOM with Chairman, NABARD as the Chairman and ED, NABARD as Member Secretary. The guidelines for these two funds have been formulated and meetings of Advisory Boards are being held at regular intervals to plan strategy and consider proposals for support under FIF / FITF.
2. Policy initiatives:
Various policy initiatives on Financial Inclusion are being initiated by Reserve Bank of India, Government of India, NABARD and Banks. The major initiatives taken by NABARD are highlighted below:
Modalities of Support from FIF / FITF
2.1. As the difficult areas need special attention, it has been decided to extend financial support from FIF & FITF at 100% of project outlay for eligible activities in Jammu & Kashmir, Uttarakhand, Jharkhand, Himachal Pradesh, Chhattisgarh and Andaman & Nicobar Islands to the banks on the lines of support in North Eastern Region and Sikkim.
2.2. The 10 districts viz., {Khammam (Andhra Pradesh); Bokaro, East Singhbum, Latehar, West Singhbum (Jharkhand); Deogarh, Gajapati, Malkangiri, Rayagada, Sambalpur (Orissa) which are considered disturbed but are not in the list of critically excluded districts are to be provided priority as applicable to critically excluded 256 districts identified by Dr. Rangarajan Committee.
Major initiatives under FITF
2.3. ICT Solution adopting BC / BF model by RRBs
We are providing support for ICT based solutions to cover all the villages in the command area of RRBs. As on 30 September 2012, grant assistance of  107.44 crore sanctioned for 54 RRBs from FITF, against which disbursements were of the order of 42.10 crore.
Due to common RFP floated by banks for engaging service provider on cluster basis, the sanctions for these projects has been kept in abeyance. A committee was constituted to examine the components under common RFP which may be supported under FITF. The committee has submitted its report which is under examination.
2.4. Support for CBS for weak RRBs
Based on the discussions of the then Finance Minister with Chairmen of RRBs held on 25 July 2010, it has been decided to support the 28 weak RRBs for CBS installation. As on 30 September 2012, 26 weak RRBs were assisted with sanction of 216.52 crore, against which disbursements are 139.71 crore. Follow up with the remaining RRBs is on.
Major initiatives under FIF
2.5. Engaging Farmers Club as BF by RRBs
Policy has been framed to stress the role of BF for achieving the objectives of Financial Inclusion and RRBs have been advised to consider appointing Farmers' Clubs as BF. This will have two pronged effect, viz:
- address the need of Financial Inclusion
- strengthening FCs – a grassroot level local association leading to far reaching and lasting impact on agriculture and rural development in the country.
Based on the keen interest shown by RRBs and Farmers Clubs acting as Business Facilitators of RRBs, the financial support is being extended for upscaling the pilot for FCs as BFs for all villages having 2000+ population in the command areas of RRBs. As on 30 September 2012, 2.08 crore sanctioned to 22 RRBs in 12 states from FIF.
2.6. Capacity Building of Business Correspondents/Business Facilitators(BCs/BFs)
A project had been sanctioned for capacity building of 20,000 BC/BFs from banks through Indian Institute of Banking & Finance (IIBF) in 2009. As on 30 September 2012, the IIBF has trained/certified total 26,533 BC/BFs through their Accredited Training Institutes due to introduction of online application system. Due to the revised modalities/delivery mechanism finalized by GoI, MoF to train BC/BF/BCAs, it has been decided to discontinue support under the scheme.
As per the common RFP floated by the banks, the service providers/vendors are now responsible for training of BC/BF/BCAs and as such support under FIF will not be provided further for this purpose.
2.7. Engaging SHGs as BC/BF by RRBs
Support to RRBs is available for engaging “Authorized functionaries of well run SHGs linked to Banks acting as BC / BF” for extending financial services in semi-urban and rural areas under its command area. The scheme aims to build capacity of the functionaries of SHGs to be engaged as BC / BF for Financial Inclusion. Guidelines in this regard have been issued to RRBs. The financial support is being extended for upscaling the pilot for SHGs as BCs/BFs for all villages having 2000+ population in the command areas of RRBs.
As on 30 September 2012, 9 RRBs have been sanctioned 46.26 lakh for supporting the training of authorised functionaries of well run SHGs in 6 states.
2.8. Support to Lead Banks for setting up of Financial Literacy and Credit Counseling Centres (FLCCs) / Financial Literacy Centres(FLCs) from FIF
It had been decided to support establishment of FLCCs by Lead Banks in 256 excluded districts and 10 disturbed districts under FIF. Further, it has been decided to support for Financial Literacy Centres (FLCs) in place of FLCCs as per new norms/guidelines issued by RBI on 06 June 2012. As on 30 September 2012, 1396.75 lakh sanctioned to Lead Banks to set up FLCCs/FLCs in 183 districts of 14 states viz. Arunachal Pradesh, Assam, Bihar, Gujarat, Haryana, Jharkand, Maharashtra, Madhya Pradesh, Manipur, Meghalaya, Orissa, Rajasthan, Uttar Pradesh & West Bengal.
2.9. Financial Literacy through Audio Visual medium – Doordarshan
A project has been sanctioned with grant assistance of 3.28 crore to Doordarshan on producing and directing a half an hour financial literacy programme in Hindi to be telecast by six centres (DD Kendras of Lucknow, Bhopal, Patna, Jaipur, Raipur and Ranchi). The telecast of all the 24 episodes in all the centres has been completed.
2.10. Micro Pension Model – Support to Invest India Micro Pension Services
A pilot project involving support of 2.26 crore has been sanctioned to Invest India Micro Pension Services (IIMPS) – Micro Pension Model for enrolling SHG members and the Rural Poor. The pilot project envisages coverage of 40000 rural poor including individual members of SHGs established by NABARD and other SHGs for delivering the Micro pension product developed by IIMPS and UTI AMC to the target population. The project will also evaluate the demand for pension and life insurance products among the rural poor. It will develop a replicable and scalable implementation strategy for expanding pension and insurance coverage among the rural poor in other districts, design appropriate mechanisms and tools for promotion and public awareness, assessing the associated costs of institutional capacity development, operations and service delivery. The project is being implemented in 8 districts of 4 states, viz., Orissa, Uttar Pradesh, Bihar and Tamil Nadu. As on 30 September 2012, 2.03 crore has been released to IIMPS and nearly 20,000 low income rural workers have been enrolled.
2.11. Centre of Excellence for Rural Financial Institutions
A meeting was held on 16th Feb, 2012 in Head Office between Shri.Nandan Nilekani, Chairman, UIDAI (Unique Identification Authority of India) and Dr. Prakash Bakshi, Chairman, NABARD to discuss the ways in which these institutions can collaborate to increase the outreach of financial
inclusion. It was desired therein that NABARD, as a key player in the field of financial inclusion, earmark a core team of its officers for furthering the outreach and acceptance of Aadhar Payments Bridge (APB) and AEPS (Aadhaar enabled Payments System) which promise to bring the much required transparency, speed and ease of operations into last mile banking.
Accordingly, NABARD has set up CERFI (Centre of Excellence for Rural Financial Institutions) with its basic responsibilities being propagation of APB and AEPS among rural financial institutions for all kinds of cashless transactions and new KCC operations. It will also document and disseminate the benefits, procedure, financial implications and time frame for adoption
of AEPS by rural financial institutions.
RRBs are being targeted in the first phase while CCBs with CBS platform will
be covered in the second. An MOU has been signed among NABARD, UIDAI and
NPCI to provide a formal outline to this collaborative effort. |
