Lok Sabha Question No. 4592 (UNSTARRED), answered on 2016-08-12
Subject: Financial Inclusion
Ministry: FINANCE
Asked by: (ADV.) JOICE GEORGE

## 4592. ADV. JOICE GEORGE:

Will the Minister of FINANCE be  pleased to state:

- (a) whether there  are differences between rural and urban financial inclusion in the country and if so, the details thereof;
- (b) whether the Government has any plans to improve the financial inclusion in rural areas and if so, the details thereof;
- (c) whether  the  microfinance  initiatives  have  any  positive  impact  on  rural  and  urban  economy  and financial inclusion; and
- (d) if not, the steps taken by the Government in this regard?

## Answer The  Minister of State in the Ministry of Finance (SHRI  SANTOSH KUMAR GANGWAR)

(a)  and (b) As per the advice of Reserve   Bank of India, domestic commercial banks have devised a three year financial inclusion plan congruent with their business strategy and comparative advantage to make it an integral part of their corporate plans. These plans broadly include self-set targets in respect of rural  brick  and  mortar  branches  opened;  business  correspondents  (BC)  employed;  coverage  of unbanked villages with population above 2000 as also other unbanked villages with population below 2000 through branches/Business Correspondents (BCs)/other modes; no-frill accounts opened including through  Business  Correspondent  -  Information  Communication  Technology  (BC-ICT);  Kisan  Credit Cards (KCC) and General Credit Cards (GCC)   issued.

The  domestic  Scheduled  Commercial  Banks  (SCBs)  have  been  mandated  in  the  Monetary  Policy Statement  -  April  2011  to  open  at  least  25  per  cent  of  their  total  number  of  branches  to  be  opened during a year in unbanked rural (Tier 5 and Tier 6) centres. Further, banks have been advised in the Monetary Policy Statement of May 2013 to front-load the opening of branches in unbanked rural centres over a 3 year cycle co-terminus with their Financial Inclusion Plan (FIP) (2013-16). Credit will be given for branches opened in unbanked rural centres in excess of 25 percent in a year which will be carried forward to the subsequent year of the FIP.

Further, with   a   view   to increase banking penetration and promoting financial inclusion with the main objective of covering all households with at least one bank account per household across the country, a National  Mission  on  Financial  Inclusion  named  as   Pradhan  Mantri  Jan  Dhan  Yojana  (PMJDY)  was launched on 28 th  August, 2014 at national level by Hon'ble Prime Minister.   Under   the   Yojana   22.65 crore  accounts (Rural - 13.93 crore and Urban - 8.72 crore) have  been opened  till  27.07.2016    and 99.99% households out of the 21.22 crore households surveyed have been covered.

(c)  and  (d)  The   micro  finance  initiatives  have  resulted  in  generating  income  and  alleviating  poverty through  creation  of  livelihood  opportunities  for  the  rural  households.  It  has  led  to  generation  of  selfemployment  opportunities  for  the  rural  poor.  The  provision  of  intensive  training  for  skill  building, backward-forward linkages and handholding with complete value chain solutions has led to increase in agriculture  production,  thus  enhancing  income  levels  in  rural  areas.  It  has  also  led  to  a  change  in consumption pattern. The spillover effects have been observed in terms of medical facilities availability, education,  sanitation  etc.   Besides,  Government  has  implemented  the  Pradhan  Mantri  Mudra  Yojana (PMMY) since April, 2015 to promote & ensure finance to the unfunded and underfunded segments of the  economy  wherein  Micro  Finance  Institutions  (MFIs)  have  played  a  significant  role. As  on 10.08.2016, Rs.15,518 crore has been sanctioned to 76,23,255 borrowers by MFIs.

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## GOVERNMENT OF  INDIA

## MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK  SABHA

## UNSTARRED QUESTION  No.  4592

TO BE ANSWERED ON  12 th  AUGUST, 2016  (FRIDAY)/SRAVANA 21, 1938 (SAKA)

## Financial Inclusion