Indian management and business studies monad university)

INDIAN BANKING SECTORAND MICRO FINANCE                                                                            Rajendra Prakash  Agrawal (Reseach Scholar     Monad ) A. H. KHAN                                                         Associate professor (School of management and Business studies MonadUniversity)

com  ABSTRACT: Indian banking system is fully mature and based onthe best practices of world banking. In last decay world economy see many up and down butour banking sector does not affect negatively and in fact after recession of2007-08 our banking system makes necessary some modification. So that systemcan face any eventuality in future. After 1991 Indian economy open up and thinkbeyond protected walls and do what other developing countries are doing butwith great care of our environment and capibilityAs the most of therural population is still not using formal banking system so they are not awareabut micro finance instrument that is why they are not included in theinclusive growth story of India. The concept of financial inclusion becomesquite challenging for the Indian rural economy. Since 2006, many focusedinitiatives are taken by NABARD and Government of India in favor of financialinclusion but the impact of these did not result satisfactory outcome.

Thepaper aims to focus on using the existing resources such as Mobile and smartphones, Banking Apps, Indian Post Office, Internet banking and Non bankingfinancial institutions (NBFCs) thereby making it more healthy and user friendlyfor the interest of the rural population as well as the formal sector. My studyfocused on 250 students studying in Monad University and most of student arelacking in basic financial literacy. So knowing the facts behind backwardnessin rural population of different part of India . we frame questionnaire and usesimple statistical tools and analyze the problem and found that most ofGovernment and private schemes related to financial inclusion( crop insurance, Beema youjna. jandhan account, sukanyia, rural mutual funds, kisan vikas patra)are not properly convinced to the masses. Usually government official goes torural areas and hold a formal talk in difficult language and so on.

For making them aware about financialinstrument we can use SMS service in local languages. What my study found thatthey have enough money but in absence financial literacy they are putting intodebt instruments which are not yielding enough to beat inflation. Their savingcan be channelize into well diversified  mutual by way of SIP . Keywords: Financial inclusion, Business correspondents, Microfinance schemes Indian Economy   INTRODUCTION We start ourjourney of economic development of India since post independence With Hindugrowth rate 3. 5% to 8. 9 in 2007-08 and on average 7. 5% from last 25 yearschange the profile of India the progress of the Indian economy, especially whenthe focus is on upliftment   of   people living at the bottom of premed isproved as sustainable development.

, There must be an attempt to include maximumnumber of participation from all the sections of the society from all part ofcountry. The attempt had been made in 1969 by Nationalization of dozen of banksin single go But the lack of awareness and financial literacy among the ruraland same urban population of the country . This big attempt (Nationalization ofbanks) not result to include everybody in formal banking system so lowering thegrowth of the economy as majority of the population does not have access toformal credit as world bank report only 35% population have bank account. Thisis a serious issue for the economic progress of the country. In order toovercome such barriers, the banking sector emerged with some technologicalinnovations such as automated teller machines (ATMs), credit and rupee cards, internet banking (only 34% have internet connectivity), etc. Thoughintroduction of such banking cutting edge technologies brought a change in theurban society, a lot of the rural population is still unaware of theseinnovations of banking technology and is out of formal banking channel.   STEPSTAKEN BY NABARD ·        Hundred per cent refinance to Hundredper cent refinance to Banks for loans given to SHGs§  Repaymentperiod of loans by banks to SHGs varies from two to three years·        Repayment period of loans by SHGs toflexible annum   OBJECTVES •     To Know the level of financial literacy•     To make them aware about micro finance•     To know the need of rural people•     To suggest instruments and schemes offinancial inclusion   PRESENT STATUS OFMICROFINANCE ·        31% (131. 1 million) of the total depositaccounts are in rural India·        43%(22.

4 million) of total creditaccounts are in rural India·        Positive impact on the poor (RohiniPande /Burgess paper        Conclusionand Recommendations  Despite 70 years as an independent nation, India is still lagging behind in the process of providing financial services tothe masses with nearly half the households remaining unbanked, and nearlyninety percent villages not having bank branches. More importantly, people inthese unbanked areas do not fully appreciate why they need a bank account atall, or why loans from the formal sector are more useful than the informalsector. The advantages of a financially inclusive model are many-fold. Illustratively, unbanked and underprivileged could receive appropriate andtimely payments for social benefit and employment schemes through the DirectCash Transfer program. The government and Reserve Bank of India have beenmaking concerted efforts since mid1950’s and with renewed vigor since 2006 butsuccess has been rather slow, due to lack of a strong network, and financialinstruments not suited to rural residents. Moreover, lack of awareness andfinancial literacy among rural population are primarily responsible for low penetrationof financial services.. All governments’ schemes are well thought of and havelonglasting impact butimplementation of these schemes are still a big problem area which needimmediate actions.

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