Financial Inclusion by extension of banking services for welfare schemes

The RBI while considering applications for opening branches gives weightage to the nature and scope of banking facilities provided by banks to common persons, particularly in underbanked areas (districts), actual credit flow to the priority sector, pricing of products, and overall efforts for promoting financial inclusion, including the introduction of appropriate new products and the enhanced use of technology for delivery of banking services.

Domestic scheduled commercial banks (other than RRBs) are permitted to open branches/ Mobile branches / Administrative offices / Central Processing Centres (CPCs) / Service branches in Tier 3 to Tier 6 centres (with population up to 49,999 as per Census 2001 – details of classification of centres tier-wise furnished in Annex 5) without permission from Reserve Bank of India in each case, subject to reporting. Domestic scheduled commercial banks (other than RRBs) are also permitted to open branches / Mobile branches / Administrative offices / Central Processing Centres (CPCs) / Service branches in rural, semi-urban, and urban centers in North Eastern States and Sikkim without permission from Reserve Bank of India in each case, subject to reporting.

The mobile branch is an extension of banking facilities through a well-protected van with arrangements for two or three officials of the bank sitting in it with books, a safe containing cash, etc.  The mobile unit would visit the places proposed to be served by it on specific days/hours. The mobile branch should not visit villages/centres which are served by cooperative banks and places served by a regular branch of commercial banks. The mobile branch should be stationed in each village/ location for a reasonable time on specified days and specified hours so that its services can be utilized properly by customers. The business transacted at the mobile branch shall be recorded in the books of the base branch/data centre. The bank may give wide publicity about the mobile branch in the village, including details of “specified days and working hours” at various locations to avoid any confusion to local customers; and any change in this regard should also be publicized. To inform the public/customers, arrangements should be made to display these details in the areas serviced by the mobile branch.

Financial Inclusion refers to the process of financial access to all including those hitherto un-served poor population of the country. The major financial schemes launched by the Government of India are Jan Dhan (PMJDY), Mudra loans (PMMY), Stand-up India, Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Atal Pension Yojana (APY), and Pradhan Mantri Vaya Vandana Yojana (PMVVY).

PMJDY (Pradhan Mantri Jan Dhan Yojana):

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is an initiation of the National Mission for Financial Inclusion of the underprivileged section of our society that is so far excluded from financial products. Implementation of the PMJDY scheme shall be based on the guiding principles of banking the unbanked, securing the unsecured, funding the unfunded, and serving unserved and under-served areas. Effective from 15.8.2018 the original principle of the opening of bank accounts shifted from “every household” to “every unbanked adult”. A Basic Savings Bank Deposit Account – BSBDA account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet even with a Zero balance. No need to maintain a minimum balance as per the Bank’s policy. Nevertheless, if the account holder wishes to get a chequebook, he/she will have to fulfill the minimum balance criteria. An individual who fulfills eligibility criteria opened the account under the scheme will be provided with a life cover of Rs.30000/-. After satisfactory operation of the SB account for 6 months, an overdraft facility up to Rs.10000/- is available to only one account per household, preferably the lady of the household. In addition to the above, a free Rupay card will be issued to the account holder. The Rupay cardholder will be eligible for Personal Accidental Insurance cover of Rs.2 lakh.

Pradhan Mantri Mudra Yojana(PMMY):
MUDRA is an acronym for Micro Units Development & Refinance Agency Ltd. The MUDRA loan scheme was launched on 8th April 2015 which provides loans to non-farming and non-corporate micro and small enterprises. These enterprises in rural, urban & metro areas can avail of collateral-free loans up to Rs.10 Lakh under the scheme. There are three categories of loans depending upon the size of the loan amount namely:
(i) The loan amount up to Rs.50000/- is classified under the Shishu category.
(ii) The loan amount exceeding Rs.50000/- and up to Rs.5.00 Lakh is classified under the Kishore category and;
(iii) The loan amount exceeding Rs.5.00 Lakhs and up to Rs. 10.00 Lakh is classified under Tarun Category. To know more Read Pradhan Mantri Mudra Yojana..

Stand Up India Scheme:
The government of India launched the Stand-Up India scheme on 5th April 2016. The Scheme facilitates bank loans to Scheduled Caste/ Scheduled Tribe borrowers. The loan amount varies between Rs.10 lakh and Rs. 1 crore for setting up Greenfield enterprises. As per the scheme guidelines, per the bank branch of scheduled commercial banks, there should be at least one Scheduled Caste/ Scheduled Tribe borrower and at least one Woman borrower. To enable banks to provide collateral-free loans to borrowers, the Government of India has set up the Credit Guarantee Fund for Stand-Up India (CGFSI) which will provide credit guarantees to those loans. Apart from providing credit facilities, the Stand-Up India Scheme also envisages extending handholding support to potential borrowers. Read Stand Up India to know more……

PMSBY (Pradhan Mantri Suraksha Bima Yojana):
PMSBY scheme offers risk coverage of Rs.2 lakh for accidental death or full disability and Rs.1 lakh for partial disability of the insured person. The premium payable is as low as Rs.12/- per year. A person between the ages of 18 and 70 years is eligible to subscribe to this scheme. To be eligible for subscribing to the scheme, the policyholder must have a bank account and he/she must give consent to join /enable auto-debit on or before 31st May for the coverage period June 1st to May 31st. Read PMSBY to know more ………

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
PMJJBY scheme offers risk coverage of Rs.2 lakh in case of death of the insured, due to any reason. The premium payable is Rs.330/- per year. A person between the ages of 18 and 50 years is eligible to subscribe to this scheme. The policyholder must have a bank account and he/she must give consent to join /enable auto-debit on or before 31st May for the coverage period June 1st to May 31st. : Read: PMJJBY more…….

APY (Atal Pension Yojana):

Atal Pension Yojana (APY) was launched on 9th May 2015. The Savings Bank account holder in the age group of 18 to 40 years in any bank or post office is eligible to subscribe to Atal Pension Yojana (APY). The subscriber has to make monthly contributions of a defined amount till he or she is 60 years of age, and after that, he or she would receive the guaranteed minimum monthly pension of Rs.1,000 or Rs.2,000 or Rs.3,000 or Rs.4,000 or Rs.5,000 at the age of 60 years. The assured minimum pension is guaranteed by the Government of India. It is mandatory to provide nomination and spouse details in the APY account. The nominee has to be someone else other than the spouse of the subscriber. The pension fund accumulated in the name of the subscriber up to 60 years of age would be paid to the nominee after the death of the subscriber. In the event of the unfortunate death of the subscriber before the age of 60 years, the spouse of the subscriber is eligible to continue contributing to the APY account of the subscriber, for the remaining vesting period, till the original subscriber has attained the age of 60 years. The spouse of the subscriber is eligible to receive the same pension amount as that of the subscriber until the death of the spouse. Read APY to know more more………..

PMVVY (Pradhan Mantri Vaya Vandana Yojana):

The ‘Pradhan Mantri Vaya Vandana Yojana ’ was launched by the Government of India on May 4, 2017, to protect elderly persons aged 60 years and above against a future fall in their interest income due to the uncertain market conditions, as also to provide social security during old age. This policy under the scheme was open for a short period and was then extended to 31 March 2020. LIC of India has been given the sole privilege to operate this scheme. The scheme provides an assured return of 8% per annum for 10 years. The mode of pension payment under the Yojana is on a monthly, quarterly, half-yearly, or annual basis depending on the option exercised by the subscriber. The minimum entry age for this scheme is 60 years. There is no maximum age limit. The minimum investment allowed is Rs.1.5 Lakh and the maximum investment allowed per person is Rs 15 lakh. The minimum pension per month is Rs.1000/- and the maximum pension is Rs.10000/ per month. Read PMVVY to know more….…..

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