1.1 BACKGROUND OF THE STUDY
Financial inclusion is based on the principal of equity and inclusive growth and will be the catalyst to empower the poor to contribute to the social and economic growth of India. As per 2011 census, about 58.7 percent households had reported availing of banking facilities. Out of the 24.69 crore households, 14.48 crore reported availing banking services, nearly 10 crore households were not availing the services; which is a significant percentile of the population. Branchless banking will usher in banking for the unbanked in India and will provide a window in financial inclusion for a large segment of the population which is poor and unbanked. Branchless Banking needs to see as the key enabler of financial inclusion
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But it could never enable any rural individual to conduct transaction from a remote location by fastening the process of financial inclusion. Despite making sufficient improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to reach the vast portion of the population. When it comes to effective and faster penetration of banking into each and every individual in the rural area and households, branchless banking is considered as an alternative of financial inclusion.
1.3 OBJECTIVES OF THE STUDY
- To study the awareness, usage and frequency of usage of services of branchless banking models.
- To determine motivating and hindering factors affecting branchless banking adoption in rural areas.
- The study is also aimed to learn about potential users of branchless banking services among rural people.
2. LITERATURE REVIEW
From literature reviewed, the major reason for the introduction of Branchless Banking in many nations of the world is that, it is seen as a way of reaching the unbanked. The unbanked can simply be described as those individuals that do not have any form of account with a bank, Anderson (2007) defined the unbanked as diverse group of individuals who remain outside the banking mainstream for many
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There have been numerous researches analyzing how financial systems help in developing economies. A great deal of consistency exists among economists regarding financial development prompting economic growth. Many theories have established that, financial development creates favourable conditions for growth through either a supply leading or a demand-following channel. According to Rajan and Zingales (2003), development of the financial system contributes to economic
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Moreover, the study also suggests new directions for future research and provides implications for managers involved in UCB banking and service marketing. We hypothesize the effect of UCB awareness, usability, reference group, disease history and price on perceived risk in UCB banking for personal use. The variables selected based on extensive review of literature.
Seibel, Hans Dieter and Fabrizio Felloni. 2005. “Mainstreaming Banking with the Poor in the Philippines.” Internationales Asienform 36(3/4): 361-375.
Initially the bank’s core banking system was product oriented, but the need of the hour was to develop a customer oriented system, because the challenge is to build customer loyalty, cross sell, and enhance repeat business.
The information and communication technology is playing a very important role in progress and advancement in all walk of life , The opening up of the banking sector and they way a bank function has changed in the current decade ,Information and communication technology has provided a very important role in delivering the best services to the bank customers. The introduction of electronic banking has changed the way the customer are moving away from the traditional branch banking system to the convenient and comfortable virtual banking system. These electronic banking channels has enhance the way a customer is availing banking services. This has reflected in increase in numbers of ATM across world and more importantly in India.
There should have a system to receive feedback from the customers in an easy way. It will help the bank to know the customer expectations.
This section was discussed about mobile banking and payments, innovative delivery channels, technologies for improved borrower identification and credit reporting, and adopting new technologies: the role of the market environment and competition. This section reviews the growth of mobile banking and payment systems and discusses technology-based business models and the role of improved borrower identification and credit reporting technologies in financial inclusion. This section also highlights that technology-based strategies for financial inclusion have varied substantially across countries and examines the features of national market environments that determine which technologies are best suited to enhance financial inclusion, as well as related to market structure and regulation that might make the success of some technology-based solutions difficult to replicate elsewhere. Major innovations in retail payment systems date back to the rise of card-based payment services. Credit cards became a wi...
Cashless term has widely familiar of Indian people in the past as well as present. The word ‘Cashless’ emphasised in everyone’s mind after demonetisation policy in November, 2016. Through cashless transactions, general people are getting so many benefits, like, low travelling costs, time saving device, paper saving device, availing more discounting facilities, etc. This transition economy may be a risky phenomenon in less familiar e-commerce people. Still a common trend increases regarding cashless transactions day by day. This facility also increases a healthy economic growth, wide turnover of different companies.
Communication modern technological tools that have been enhanced by Information Technology are having an impact on changing the very structure and communication of banking. That is, clients are enabled to make their banking transactions whenever and wherever they want. Bank clients, by just logging on their online account, can transfer any amount of money from their account to any other account, check their last processed banking transactions and apply for loans and other banking services. According to Keyes ( 2000, p.591) 'electronic checks provide consumers with the benefits of convenience and safety while allowing billers to maintain their existing depository relationships with their banks'. Further, e-mails has enabled bank employees to notify their customers of any new enhanced bankin...
Financial Inclusion refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity products. Financial inclusion broadens the resource base of the financial system by developing culture of savings among large segment of rural population and plays its own role in the process of economic development. Further, by bringing low income groups within the perimeter of formal banking sector; financial inclusion protects their financial wealth and other resources in exigent circumstances. Financial inclusion also mitigates the exploitation of vulnerable sections by the usurious money lenders by facilitating easy access to formal
At the end of the day, it is the women who are at the receiving end of the brunt of financial noninclusion in growing economies. Just 37% of women have formal account in contrast to 46% of men. Indeed, there is a palpable gender gap of 6 to 9 percentage across income clusters inside growing economies. Permitting easy and broad admission to financial services, without any price or non-price barriers to their use & presented in an accountable manner, have been shown to benefit the poor people and other various disadvantaged groups. The easy availability of capital will allow the poor people to recognize small business opportunities, with increase in flow on welfare effects, i.e., affecting the economy of the country.
Bihar is one of the most undeveloped States in terms of the outreach and development of banking services. Despite being third largest in population, the banking network in the State comprises of only 5 percent of the all bank branches in the country. The bank branch network in Bihar shows that out of a total of 3,698 branches of various banking entities, 63% of the branches are in the rural areas, 20.7% in semi urban area and 16.3% are located in the urban centers2. Given a rural area of about 94,000 square kilometers this translates to a bank branch on average every 35 square
In conclusion a cashless society seems positive and quite close that we actually think, but the main issues of these opportunities will solely depend on whether the benefits would outweigh the disadvantages. We can already see that many people agree with the government on the cashless economy but on the other hand other people such as Christians will not probably accept this as a norm. It is vital to understand if society moves to a cash free economy, the benefits must distinctively overshadow in the end. It appears that much has been done in terms of the awareness of a cashless society as technology advances in progression with the use of electronic devices and system without the exchange of anything tangible. However
The study is primarily designed to find out the continuous issue of the banking system in
One of the reasons why banks adopted this new system, was the ‘boom’ in online shopping and the need for an online payment platform. For the bank themselves, online banking reduces customer service staffing levels, as well as improving speed and flexibility of business transactions. (Shih and Fang, 2004)