final project on financial inclusion

7/31/2019 Final Project on Financial Inclusion

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The recent developments in banking technology have transformed banking from the traditionalbrick-and-mortar infrastructure like staffed branches to a system supplemented by other channelslike automated teller machines (ATM), credit/debit cards, internet banking, online moneytransfers, etc. The moot point, however, is that access to such technology is restricted only tocertain segments of the society. Indeed,some trends, such as increasingly sophisticated customersegmentation technology allowing, for example, more accurate targeting of sections of themarkethave led torestricted access to financial services for some groups. There is a growingdivide, with an increased range of personal finance options for a segment of high and uppermiddleincome population and a significantly large section of the population who lack accessto even the most basic banking services. This is termed financial exclusion. These people,particularly, those living on low incomes, cannot access mainstream financial products such as

bank accounts, credit, remittances and payment services, financial advisory services, insurancefacilities, etc.

Deliberations on the subject of Financial Inclusion contributed to a consensus that merely havinga bank account may not be a good indicator of financial inclusion. Further, indebtedness asquantified in the NSSO 59th round (2003) may not also be a reflective indicator. The idealdefinition should look at people who want to access financial services but are denied the same. Ifgenuine claimants for credit and financial services are denied the same, then that is a case ofexclusion. As this aspect would raise the issue of credit worthiness or bankability, it is alsonecessary to dwell upon what could be done to make the claimants of institutional creditbankable or creditworthy. This would require re-engineering of existing financial products or

delivery systems and making them more in tune with the expectations and absorptive capacity ofthe intended clientele. Based on the above consideration, a broad working definition of financialinclusion could be as under:Financial inclusion may be defined as the process of ensuring access to financial services andtimely and adequate credit where needed by vulnerable groups such as weaker sections and low

income groups at an affordable cost.

The essence of financial inclusion is in trying to ensure that a range of appropriate financialservices is available to every individual and enabling them to understand and access thoseservices. Apart from the regular form of financial intermediation, it may include a basic no frillsbanking account for making and receiving payments, a savings product suited to the pattern of

cash flows of a poor household, money transfer facilities, small loans and overdrafts forproductive, personal and other purposes, insurance (life and non-life), etc. While financialinclusion, in the narrow sense, may be achieved to some extent by offering any one of theseservices, the objective of Comprehensive Financial Inclusion would be to provide a holistic setof services encompassing all of the above.


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My project report is based on technology based financial inclusion under BC (BusinessCorrespondence) model. Financial inclusion is new concept which is initiated by NABARD

organizations and it is implemented in all banks according to RBI. Financial inclusion is done for

the rural areas with the help of technology which is held on-line. Without the help of BC agents

it would not be possible. It is done every banking transaction of deposit and withdrawal in rural

areas. I would like to throw on this topic in further of the report.

Financial Inclusion

Financial inclusion may be defined as the process of ensuring access to financial services and

timely and adequate credit where needed by vulnerable groups such as weaker sections and lowincome groups at an affordable cost.

Financial inclusion is delivery of banking services at an affordable cost to the vast sections of

disadvantaged and low income groups. Unrestrained access to public goods and services is the

sine qua non of an open and efficient society. As banking services are in the nature of public

good, it is essential that availability of banking and payment services to the entire population

without discrimination is the prime objective of the public policy.

It is becoming increasingly apparent that addressing financial exclusion will require a holistic

approach on the part of the bank in creating awareness about financial products, education, andadvice on money management, debt counseling, savings and affordable credit. Technology can

be a very valuable tool in providing access to banking products in remote areas. The bank has

evolved specific strategies to expand the outreach of services in order to promote financial

inclusion. We should give wide publicity to products offered under financial inclusion through

business correspondent for the benefits of rural masses.

Our bank has planned to render financial services in 20,000 un-banked villages through Smart

Card based business correspondent module during next three years. Villages having population

2000 or more are to be covered during current financial year. Accordingly 6000 villages are to be

covered during current financial years and 7000 villages per year shall be covered duringsubsequent two years.


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Business Correspondents

BCs are retail agents engaged by banks for providing banking services at locations other than a

bank branch/ATM. Banks are required to take full responsibility for the acts of omission &

commission of the BCs that they engage & have, therefore, to ensure thorough due diligence &

additional safeguards for minimizing the agency risk. Basically, Bcs enable a bank to expand its

outreach & offer limited range of banking services at low cost, as setting up a brick & mortar

branch may not be viable in all cases. BCs, thus, are an integral part of a business strategy for

achieving greater financial inclusion.

Banks are permitted to appoint following entities as BCs

1. Section 25 companies in which NBFCs, banks, telecom companies and othercorporate entities or their holding companies do not have holdings in excess of 10%

2. NGOs/ MFIs set up under societies / trust acts

3. Societies registered under Mutually Aided Cooperative Societies Act or theCooperative Societies act of states.

4. Individuals

5. Locally settled retired Government employees like banks, post masters, schoolteachers, ex-servicemans, etc.

6. Individual Kirana /medical/fair price shop owners

7. Individual Public Call Office (PCO) Operators

8. Agents of small savings schemes of Government of India / Insurance Companies

9. Individuals who own petrol pumps

10.Authorized functionaries of well run Self Help Groups (SHGs) linked to the banks.

11.Companies registered under the Indian companies Act, 1956 with large and

widespread retail outlets, excluding Non Banking Financial Companies (NBFCs).


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BANK OF BARODA

Bank of Baroda (BoB) (BSE: 532134) (Hindi: ) is the highest profit-making PSUbank in India and the third largest PSU bank in terms of number of total business in India. BoB isranked 763 in Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh crores, orRs. 3,583 billion, a network of 3,991 branches (out of which 3904 branches are in India) andoffices, and about 1,657 ATMs. It plans to open 400 new branches in the coming year. It offers awide range of banking products and financial services to corporate and retail customers through avariety of delivery channels and through its specialized subsidiaries and affiliates in the areas ofinvestment banking, credit cards and asset management. Its total business was Rs. 5,452 billionas of June 30.

As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number shouldclimb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth branch inthe United Kingdom. The bank also plans to open five branches in Africa. Besides branches,BoB plans to open three outlets in the Persian Gulf region that will consist of ATMs with acouple of people.

The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in theprincely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks ofIndia, was nationalized on 19 July 1969, by the government of India


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Our Vision & Mission

To be a top ranking National Bank of International Standards committed

to augmenting stake holders value through concern, care and competence.

OVERVIEW OF BANK OF BARODA

TYPE PUBLIC

TRADED AS BSE 532134

INDUSTRY BANKING AND FINANCIAL SERVICES

FOUNDED 1908

HEADQUARTERS

Vadodara, India

Ahmedabad, India

AREA SERVED Worldwide

KEY PEOPLEM. D. Mallya

(Chairman & MD)
http://en.wikipedia.org/wiki/Vadodarahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/Managing_Directorhttp://en.wikipedia.org/wiki/Managing_Directorhttp://en.wikipedia.org/wiki/Chairmanhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Vadodara


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PRODUCTS

Credit cards, consumer banking, corporate banking, finance and insurance,

investment banking, mortgage loans, private banking, private equity, wealth

management

REVENUE 25,800 crore (US$5.15 billion) (2011)

NETINCOME 4,433 crore (US$884.38 million) (2011)

TOTAL ASSETS 355,826 crore (US$70.99 billion) (2011)

WEBSITE www.bankofbaroda.com

International presence

In its international expansion, the Bank of Baroda followed the Indian diaspora, especially that of

the Gujaratis. It has significant international presence with a network of 72 offices in 25

countries, six subsidiaries, and four representative offices.

Among the Bank of Barodas 85 overseas branches are ones in the worlds major financial

centers (e.g., New York, London, Dubai, Hong Kong (which it has upgraded recently), Brussels

and Singapore), as well as a number in other countries. The bank is engaged in retail banking via

17 branches of subsidiaries in Botswana, Guyana,Kenya, Tanzania, and Uganda. The Bank of

Baroda also has a joint-venture bank in Zambia with nine branches. The Bank of Baroda

maintains representative offices in Malaysia, China, Thailand, and Australia. It plans to upgrade

its offices in China and Malaysia shortly to a branch and joint-venture, respectively. It also has a

large presence in Mauritius with about seven branches spread out in the country.

The Bank of Baroda has received permission or in-principle approval from host country

regulators to open new offices in Trinidad and Tobago and Ghana, where it seeks to establish

joint ventures or subsidiaries. The bank has received Reserve Bank of India approval to open
http://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/Private_equityhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://www.bankofbaroda.com/http://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/New_Yorkhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Brusselshttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Botswanahttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Zambiahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Trinidad_and_Tobagohttp://en.wikipedia.org/wiki/Ghanahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Ghanahttp://en.wikipedia.org/wiki/Trinidad_and_Tobagohttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Zambiahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Botswanahttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Brusselshttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/New_Yorkhttp://en.wikipedia.org/wiki/Gujarathttp://www.bankofbaroda.com/http://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/United_States_dollarhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Private_equityhttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Commercial_bank


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offices in The Maldives, and New Zealand. It is seeking approval for operations in Bahrain,

South Africa, Kuwait, Mozambique, and Qatar, and is establishing offices in Canada, New

Zealand, Sri Lanka,Bahrain,Saudi Arabia, and Russia. It also has plans to extend its existing

operations in the United Kingdom, the United Arab Emirates, and Botswana. The slogan of Bank

of Baroda is "India's International Bank".

History

1908-1959

1908:Maharaja Sayajirao Gaekwad IIIset up Bank of Baroda (BOB).

1910: BoB established its first branch in Ahmedabad.

1953: BoB established a branch in Mombasa and another in Kampala.

1954: BoB opened a branch in Nairobi.

1956: BoB opened a branch in Dar-es-Salaam.

1957: BoB established a branch in London.

1959: BoB acquired Hind Bank.

1960s

1961: BoB merged in New Citizen Bank of India. This merger helped it increase its branch

network in Maharashtra.

BOB also opened a branch in Fiji.

1962: BoB opened a branch in Mauritius. 1963: BoB acquired Surat Banking Corporation in Surat, Gujarat.

1964: BoB acquired two banks, Umbergaon Peoples Bank in southern Gujarat and Tamil Nadu

Central Bank in Tamil Nadu state.

1964: BoB lost its branch in Narayanjanj (East Pakistan) due to the Indo-Pakistan war. It is

unclear when BOB had opened the branch.

1965: BoB opened a branch in Guyana.

1967: The Tanzanian government nationalized BoBs three branches there and transferred their

operations to the Tanzanian government-owned National Banking Corporation.

1969: The Government of India nationalized 14 top banks, including BoB.

BoB incorporated its operations in Uganda as a 51% subsidiary, with the government owning the

rest.

1970s

1972: BoB acquired The Bank of Indias operations in Uganda.

1974: BoB opened a branch each in Dubai and Abu Dhabi.

1975: BoB acquired the majority shareholding and management control ofBareilly Corporation

Bank (est. 1928) and Nainital Bank (est. in 1954), both in Uttar Pradesh. Since then, Nainital

Bank has expanded to Uttarakhand State.
http://en.wikipedia.org/wiki/Maldiveshttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Bahrainhttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Kuwaithttp://en.wikipedia.org/wiki/Mozambiquehttp://en.wikipedia.org/wiki/Qatarhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Sri_Lankahttp://en.wikipedia.org/wiki/Bahrainhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/Botswanahttp://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Kampalahttp://en.wikipedia.org/wiki/Nairobihttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Fijihttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/Abu_Dhabihttp://en.wikipedia.org/wiki/Nainital_Bankhttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Uttarakhandhttp://en.wikipedia.org/wiki/Uttarakhandhttp://en.wikipedia.org/wiki/Uttar_Pradeshhttp://en.wikipedia.org/wiki/Nainital_Bankhttp://en.wikipedia.org/wiki/Abu_Dhabihttp://en.wikipedia.org/wiki/Dubaihttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Fijihttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Nairobihttp://en.wikipedia.org/wiki/Kampalahttp://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Botswanahttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/Bahrainhttp://en.wikipedia.org/wiki/Sri_Lankahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Qatarhttp://en.wikipedia.org/wiki/Mozambiquehttp://en.wikipedia.org/wiki/Kuwaithttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Bahrainhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Maldives


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1976: BoB opened a branch in Oman and another in Brussels. The Brussels branch was aimed at

Indian firms from Mumbai (Bombay) engaged in diamond cutting and jewellery having business

in Antwerp, a major center for diamond cutting.

1978: BoB opened a branch in New York and another in the Seychelles.

1979: BoB opened a branch in Nassau, the Bahamas.

1980s

BoB opened a branch in Bahrain and a representative office in Sydney, Australia.

BoB, Union Bank of India and Indian Bank established IUB International Finance, a licensed

deposit taker, in Hong Kong. Each of the three banks took an equal share.

1985: BoB (20%), Bank of India (20%), Central Bank of India (20%) and ZIMCO (Zambian

government; 40%) established Indo-Zambia Bank (Lusaka). BoB also opened an Offshore

Banking Unit (OBU) in Bahrain.

1988: BoB acquired Traders Bank, which had a branch network in Delhi.

1990s

1990: BoB opened an OBU in Mauritius, but closed its representative office in Sydney.

1991: BoB took over the London branches ofUnion Bank of India and Punjab & Sind Bank (P&S).

P&Ss branch had been established before 1970 and Union Banks after 1980. TheReserve Bank

of India ordered the takeover of the two following the banks' involvement in the Sethia fraud in

1987 and subsequent losses.

1992 BoB incorporated its operations in Kenya into a local subsidiary with a small tranche of

shares quoted on the Nairobi Stock Exchange.

1993: BoB closed its OBU in Bahrain.

1996: BoB Bank entered the capital market in December with an Initial Public Offering (IPO). TheGovernment of India is still the largest shareholder, owning 66% of the bank's equity.

1997: BoB opened a branch in Durban.

1998: BoB bought out its partners in IUB International Finance in Hong Kong. Apparently this

was a response to regulatory changes following Hong Kongs reversion to the Peoples Republic

of China. The now wholly owned subsidiary became Bank of Baroda (Hong Kong), a restricted

license bank.

BoB also acquired Punjab Cooperative Bank in a rescue.

BoB also incorporate wholly owned subsidiary BOB Capital Markets Ltd.for Broking Business.

1999: BoB merged in Bareilly Corporation Bank in another rescue. At the time, Bareilly had 64branches, including four in Delhi.

In Guyana, BoB incorporated its branch as a subsidiary, Bank of Baroda Guyana.

BoB added a branch in Mauritius, but closed its Harrow Branch in London.
http://en.wikipedia.org/wiki/Omanhttp://en.wikipedia.org/wiki/Brusselshttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Bombayhttp://en.wikipedia.org/wiki/Antwerphttp://en.wikipedia.org/wiki/Diamond_cuttinghttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Sydneyhttp://en.wikipedia.org/wiki/Union_Bank_of_Indiahttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Union_Bank_of_Indiahttp://en.wikipedia.org/wiki/Punjab_%26_Sind_Bankhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Initial_Public_Offeringhttp://en.wikipedia.org/wiki/IPOhttp://en.wikipedia.org/wiki/Durbanhttp://en.wikipedia.org/wiki/BOB_Capital_Marketshttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/BOB_Capital_Marketshttp://en.wikipedia.org/wiki/Durbanhttp://en.wikipedia.org/wiki/IPOhttp://en.wikipedia.org/wiki/Initial_Public_Offeringhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Punjab_%26_Sind_Bankhttp://en.wikipedia.org/wiki/Union_Bank_of_Indiahttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Union_Bank_of_Indiahttp://en.wikipedia.org/wiki/Sydneyhttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Diamond_cuttinghttp://en.wikipedia.org/wiki/Antwerphttp://en.wikipedia.org/wiki/Bombayhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Brusselshttp://en.wikipedia.org/wiki/Oman


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2000s

2000: BoB established Bank of Baroda (Botswana).

2002: BoB acquired BenaresState Bank(BSB) at the Reserve Bank of Indias request. BSB was

established in 1946 but traced its origins back to 1871 and its function as the treasury office ofthe Benares state. In 1964, BSB had acquired Bareilly Bank (est. 1934), with seven branches; it

also had taken over Lucknow Bank in 1968. The acquisition of BSB brought BOB 105 new

branches.

2002: Bank of Baroda (Uganda) was listed on the Uganda Securities Exchange (USE).

2003: BoB opened an OBU in Mumbai.

2004: BoB acquired the failed Gujarat Local Area Bank, and returned to Tanzania by establishing

a subsidiary in Dar-es-Salaam. BoB also opened a representative office each in Kuala Lumpur,

Malaysia, and Guangdong, China.

2005: BoB built a Global Data Centre (DC) in Mumbai for running its centralized banking solution

(CBS) and other applications in more than 1,900 branches across India and 20 other counties

where the bank operates. BoB also opened a representative office in Thailand.

2006: BoB established an Offshrore Banking Unit (OBU) in Singapore.

2007: In its centenary year, BoBs total business crossed 2.09 lakh crores, its branches crossed

1000, and its global customer base 29 million people.

2008: BoB opened a branch in Guangzhou, China (02/08/2008) and in Kenton, Harrow United

Kingdom. BoB opened a joint venture life insurance company with Andhra Bank and Legal and

General (UK) called India First Life Insurance Company

2010s

2010: Malaysia awarded a commercial banking license to a locally incorporated bank to be

jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra Bank. The new bank, India

BIA Bank (Malaysia), will reside in Kuala Lumpur, which has a large population of Indians. AndhraBank will hold a 25% stake in the joint-venture; BoB will own 40% and IOB the remaining 35%.

BoB opened a branch in New Zealand

Subsidiaries

BOB Capital Markets Ltd. (BOBCAPS) is a SEBI-registered investment banking company

based in Mumbai, Maharashtra. It is a wholly owned subsidiary of Bank of Baroda. Its financial

services portfolio includes Initial Public Offerings, private placement of debts, corporate

restructuring, Business valuation, mergers & acquisition, project appraisal and loan syndication.

Bank of Baroda financials 2012

Sales Rs. 24,695 crores Profits Rs. 4,241 crores Assets Rs. 3,58,397 crores
http://en.wikipedia.org/wiki/Benareshttp://en.wikipedia.org/wiki/Benareshttp://en.wikipedia.org/wiki/Bank_of_Baroda_(Uganda)http://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Guangdonghttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Guangzhouhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Andhra_Bankhttp://en.wikipedia.org/wiki/Legal_and_Generalhttp://en.wikipedia.org/wiki/Legal_and_Generalhttp://en.wikipedia.org/wiki/IndiaFirst_Life_Insurance_Companyhttp://en.wikipedia.org/wiki/Indian_Overseas_Bankhttp://en.wikipedia.org/wiki/Andhra_Bankhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Initial_Public_Offeringshttp://en.wikipedia.org/wiki/Private_placementhttp://en.wikipedia.org/wiki/Restructuringhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Loan_syndicationhttp://en.wikipedia.org/wiki/Loan_syndicationhttp://en.wikipedia.org/wiki/Project_appraisalhttp://en.wikipedia.org/wiki/Restructuringhttp://en.wikipedia.org/wiki/Private_placementhttp://en.wikipedia.org/wiki/Initial_Public_Offeringshttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Securities_and_Exchange_Board_of_Indiahttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Andhra_Bankhttp://en.wikipedia.org/wiki/Indian_Overseas_Bankhttp://en.wikipedia.org/wiki/IndiaFirst_Life_Insurance_Companyhttp://en.wikipedia.org/wiki/Legal_and_Generalhttp://en.wikipedia.org/wiki/Legal_and_Generalhttp://en.wikipedia.org/wiki/Andhra_Bankhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Guangzhouhttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/Guangdonghttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Bank_of_Baroda_(Uganda)http://en.wikipedia.org/wiki/Benares


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RBI JOURNAL PUBLICATIONS

Theories of development advocate that financial development creates enabling conditions for

growth through either a supply-leading (financial development spurs growth) or a demand-

following (growth generates demand for financial products) channel. Earlier theories of

development hypothesised that a rise in inequality was inevitable in the early stages of

development. The early literature on the subject focussed on the need to develop an extensive

financial system that could tap savings and then channel the funds so generated to a wide

spectrum of activities. The modern development theory perceives the lack of access to finance as

a critical factor responsible for persistent income inequality as well as slower growth. A large

body of empirical literature suggests that developing the financial sector and improving access to

finance may accelerate economic growth along with a reduction in income inequality andpoverty. Without an inclusive financial system, poor individuals and small enterprises have to

rely on their own limited savings and earnings to invest in their education and entrepreneurship

to take advantage of growth opportunities (World Bank, 2008).

Report of the Committee for Financial Inclusion, 2008

In the Indian context, financial inclusion, according to the Finance Ministers 2006-07 budget

speech, was defined as the process of ensuring access to timely and adequate credit and

financial services by vulnerable groups at an affordable cost (Union Budget, 2007-2008). In a

similar vein, the Committee on Financial Inclusion defines financial inclusion as the processof ensuring access to financial services and timely, adequate credit where needed, to vulnerable

groups such as weaker sections and low income groups, at an affordable cost

THE INDIAN ECONOMY REVIEW

Rangarajan Committee (2008) viewed financial inclusion as The process of ensuring access to

financial services and timely and adequate credit where needed by vulnerable groups such as

weaker sections and low income groups at an affordable cost. All efforts made to encourage

financial inclusion will turn futile, unless the deprived class is brought into mainstream banking

and channelizing banking services to diverse class of the society whose 37.2% population (as per

Tendulkar Committee Report) reeling under poverty with majority contribution is from the rural

belt will be daunting challenge which needs spirited policy adjustments, innovation in product

dynamics, proficient human resource and technological circumvention at all levels to marginalize

the hiatus. A conventional and unconventional measures needs to be advocated as orthodox

banking practices will head nowhere in breaking the bottlenecks faced at the grass root level.


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Selection of Research methodology is based on research problem. For this research a

detail study on selected products was done and various books and websites were referred for any

type of information related to the study. The methodology is applied briefly which is discussing

step by step.

RESEARCH PROBLEM

The main research problem is what are the technology used based on financial inclusion.

It also wants to know whether the technology and BC model is effective or not. It is also

important to know about the cash management in BC model.

SCOPE OF THE STUDY

The project report deals with technology based financial inclusion of BC model.

It helps me to learn real scenario of effectiveness of BCs and technology and its cash

management.

It also helps me to learn on how to administer and manage the Bank.

It gives the knowledge on the enrolment process and risk factors.

It also gives information on transaction and its accounting process.

LIMITATION OF THE STUDY

The study is carried basing on the information and documents provided by the company and

based on the interaction with the various employees of the company.

Most of the information are not given by company because that information is confidential to

the company only.

The period of two months is not enough to conduct a depth study.

Due to hectic of work they couldnt interact or co-operate fully or to give a kind information

so much.

Data CollectionData was collected from secondary sources through bank.


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Though the concept of providing banking services through appointed agents is not new in India

however it was not a very popular concept in general public due to absence of technologycomponent for authenticity of financial transaction. At present most of the nationalized banks areproviding financial services through brick and mortar model and it is not feasible to open abanks branch in every village. In view of this Government of India has decided to leverage

available technology for rendering financial services in all un-banked area and include vastsections of disadvantaged and low income groups in main stream for financial development.

In this regard various committees have been setup by the Government at various levels and theyhave suggested some ITC based models to provide banking services in a cost effective manner.Our bank has identified 20000 villages to render financial services through ICT based Businesscorrespondent model in service area of our branches.

Since it is a new concept emerged in the market, we need to create awareness amongst general

public where financial inclusion solution to be implemented so that common man should

understand the initiatives taken by the bank to fulfill financial needs of such population.

Corporate office has already issued the guidelines in this direction to respective Zones/Regions.

At present bank has decided to implement smart card based financial inclusion solution

across the country. We have planned to implement end-to-end FI solution in which

hardware, software, smart card, handheld devices, connectivity, support / maintenance of

hardware & software and Business correspondents are to be provided by the service

provider. The service provider will install the server at our data centre to maintain

historical and transaction data. Data related to Accounts like KYC details, financial &

non-financial Transactions etc., should be accessed / updated online/offline from/to

Banks CBS (Finacle) server. In other words, upon authorization of enrollment data,

account should get opened immediately in our CBS (Finacle) Server and thereafter all

customer transactions should take place in CBS (Finacle) directly through online &

offline mode. It is imperative that the server should be synchronized by latest 6 pm on

daily basis to ensure successful end of day and that the internal memory is clean for start

of next day.


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Smart CardA plastic card containing a microprocessor that enables the holder to perform operations

requiring data that is stored in the microprocessor; typically used to perform financial

transactions.

Hand Held DevicesHandheld device is a small portable machine through which BC can perform banking

transactions for financial inclusion customers. The machine is voice enabled and capable to

capture/authenticate biometric data. After completion of successful transaction machine prints a

receipt for customer indicating transaction details as valid transaction proof. To perform any

transaction through POS device physical presence of the customer along with smart card is

required.


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We have designed a simplified one page (Printed on both side of a page) Savings Bank Account

opening form exclusively for opening of financial inclusion savings account which should be

used at the time of enrolment. The form is enclosed as annexureI.

Link branch has to plan enrolment process in the designated village/cluster of villages along withBC and service provider. BC should be introduced to the residents and inform the public that BC

will provide banking services in the village on be half of the bank through hand held device,carry out demonstration of few transactions so that common man should understand the process,develop confidence and encourage others for enrolment. Inform the general public to collectmachine generated receipt of transaction without fail for their safety and security. Hand writtenor any other receipt generated other than hand held device should not be accepted which is not agenuine transaction receipt. During enrolment process biometric and demographic data will becaptured to issue a smart card. KYC guidelines applicable to no frill accounts are to be followedat the time of enrolment.

Enrolment is opening of accounts, during this process Business correspondent will fill in account

opening form for the applicant, enter the related data in enrolment kit, and capture all 10 fingers

tip images through biometric device and photo of an applicant. Therefore, applicant needs to be

present at the time of enrolment process. The BC will also collect KYC documents as per

simplified procedure for opening of no-frills account. The simplified KYC procedure for opening

of no frills account is as under.

KYC IDENTIFICATION DOCUMENTS/PAPERS TO BE

SUBMITTED BY APPLICANT(S)

(Any one document from each of the following two lists subject to Banks satisfaction)


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LISTI(Latest/recent documents showing identity proof))

LIST-IILatest/recent documents showing address proof)

1.Driving license with photograph 1.Driving license with address, Voters IdentityCard,

2. NREGA job card 2. Telephone Bill, Electricity Bill, Ration Card

3. Voters identity Card 3. Bank account statement (with address),NREGA Job Card

4.PAN Card, Government ID Card 4. Any documentary evidence in support ofresidential address acceptable to the Bank.

5. Any other document with photograph evidencingidentity of the applicant/s acceptable to the bank.

5. In case of married women address proof of thegroom is acceptable

In case beneficiary do not hold any such document then, branch can take the individual'sintroduction from an existing account holder on whom the full KYC procedure has beencompleted and has had satisfactory transactions with the bank for at least six months Thephotograph and address of the prospective account holder need to be certified by the person whointroduces him/her. These simplified KYC norms are applicable for those who intend to keepbalances not exceeding Rs. 50,000 in all their accounts taken together. The total credit in all theaccounts taken together should not exceed Rs. 1 lakh in a year.

The BC will enter all account details in to the enrolment system for opening of Bank account and

submit account opening forms along with KYC documents available with the applicant to the

respective link branch for verification of KYC norms and checking of details entered in to the

enrolment system. The service provider will process the data and handover the file to the bank

for uploading in to our CBS system. After uploading of the file in to CBS, branch has to verify

the accounts through menu options HCUMM and HOAACVSB preferably on the same day.

Branch to ensure that details entered by the BC while enrolment is correct and applicant has

fulfilled the KYC norms applicable for opening of no-frills accounts. In case branch observes

some errors/mistakes in the enrolment data same should be conveyed to the service provider/BC

for correction or reject the account opening with appropriate reasons for rejection. The service

provider will correct the data of rejected accounts and re-upload in to the CBS for opening of

accounts. Again branch to follow same process in CBS for verification of accounts. After

opening of the accounts in to CBS service provider will issue smart card to the customer with in10 days from date of opening of the account.


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Issue of Smart Card

After successful completion of enrollment service provider will submit all accountopening forms to the link branch for KYC verification and authorization of account in the

CBS. Branches have to authorize all accounts through HCUMM & HOAACVSB menuoptions. The smart card shall be issued to the customer within 10 days from date ofverification of account details by the branch.

Service provider will customized the smart card as per bank requirement and following

details will appear on the face of the card.

SMART CARD Details1. Our Banks Name & Logo2. Name of the customer3. Photo of the account holder4. Address5. Village6. State with pin code7. Card Number8. Account Number9. Swabimaan Logo10. Logo of service provider

Other side of the card:1. Instructions2. Address of Financial Inclusion cell.

At present bank has decided to issue smart card to the financial inclusion customer

without recovering any cost. In case of loss or damage of card, cost of re-issue of card

may be passed on to the customer. No transaction can be processed without card

therefore customer has to maintain card in a good condition. The smart card is capable to

store account details, biometric data, latest 10 transaction of the account and balance

available in the account.

De- Activation of Card:

BC will arrange for immediate de-activation of the card on receipt of intimation

regarding the card being lost, closure of account and death of Card holder, etc.


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All cash transactions are to be carried out on hand held device. To perform any successfultransaction presence of the account holder along with smart card is required. Customer need notfill in any deposit / withdrawal slip or sign any document to perform the transaction. The smartcard will be inserted in to card reader device of the hand held machine and machine will promptthe customer in local language to place a finger on biometric device for authenticity of thegenuine customer. After successful completion of customer authentication BC can performfinancial/non-financial transaction for the customer (Financial Transactions:Deposit/Withdrawal, Non-financial Transactions: Balance enquiry, mini statement). Forperforming financial transactions BC will enter the amount of transaction requested by thecustomer in to hand held device. Device will confirm the amount with voice prompt in locallanguage for better understanding and transparency. Hand held device will process the

transaction after biometric authentication. After completion of successful transaction hand helddevice will print transaction receipt indicating transaction details. BC will collect/pay the cashfrom/to the customer. This printed receipt generated by the device is only valid transactionreceipt for customer record. Simultaneously balance available in the account will be updated onthe smart card automatically. Similarly customer can inquire balance in the account and requestfor mini statement through BC. Mini statement will contain latest 10 transactions of the account.

The customer can perform maximum 2 (Two) transactions in an account per day. In view of the

financial risk involved, it has been decided to allow maximum withdrawal of Rs. 1000/- and

deposit of Rs 5000/- per transaction per day through BC. Depending upon the connectivity

available in the village online or offline transactions will be carried out through BC. However,

customer may approach the branch for any transaction irrespective of amount through hand held

device being provided at the base branch.


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System will work online and offline mode as per availability of network. It has been decided to

open all financial inclusion accounts in our CBS system on day to day basis through business

correspondent. In case of online transactions our CBS will be upgraded on real time basis.

However, in case of offline transactions, at the end of the day BC will upload daily transactions

on aggregation server for consolidation and maintenance of individual account. Subsequently on

same day service provider will upload all transactions data automatically on our CBS server

through interface. During the process transactions will be updated in the respective accounts in

our CBS.

Branch has to open/maintain following accounts to route the financial inclusion

transactions

1. Current account/ Overdraft account of BC (no charges are to be levied in suchaccount) any transaction other than financial inclusion entries are not allowed toroute through this account.

2. Similarly P/L Service charges on Financial Inclusion and P/L Interest Paid onsavings bank FI accounts are also to be opened by data centre for the respectivelink/ base branches.

Following entries will be passed by the system on real time basis or during day endin CBS depending upon online/offline mode of transactions

1. On receiving cash by field BC for crediting customers account.a. Dr. Current account/ Overdraft Account of BCb. Cr. Respective customers account

2. On Cash payments made by the field BC to various customers.c. Dr. Respective customers accountd. CR Current account/Overdraft Account of BC.


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Good cash management means when, where and how your cash needs will occur. Business

correspondents are empowered to carry out financial transactions on behalf of the bank and will

be in need of cash to perform transactions.

Management of Cash held by the BCsCash management system need to be put in place for monitoring of receipts and payments

made by the business correspondents at field level. At present various banks have

adopted centralized and decentralized cash management for this purpose. We are

planning to implement decentralized cash management system in our bank. The salient

features of the scheme are as under.

1. Bank will assign separate overdraft sub head code for opening of overdraft accounts of

the BCs.

2. The Overdraft facility should be granted to the business correspondent against fixeddeposit or bank guarantee as collateral security with zero rate of interest.

3. Individual branch may obtain the fixed deposit of equivalent amount of limit sanctionedto the BC and obtain the necessary documents required for overdraft facility.

4. Or one consolidated limit may be sanctioned to the corporate BC against bank grantee ascollateral security and sub limit will be fixed for each link branch.

5. Branch will allow need based withdrawal up to certain amount to the BC and keepremaining balance in the account to meet the transactions.

6. BC should arrange to deposit the cash at branch on same day or at opening of next day onaccumulation of cash above retention limit.

7. Depending upon availability of network, online or off line transactions will be processedthrough POS devices.

8. Once in a fortnight, the BC has to settle the entire overdraft by depositing the balancecash to the Overdraft account and a fresh withdrawal will be made for further cash to the

Business Correspondent.

9. The consolidated debit balance of BCs accounts will be reflected under Suspense Cashwith BC and consolidated credit balance will appear as Suspense Cash with BC(Credit Balances) in the Balance sheet of branch/Bank.

10.Branch has to monitor overdraft account of the BC on daily basis.


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11.Reports can be taken at all levels for regularly monitoring of cash.The following entries would be posted at the respective branches while dealing with

BC cash:

1. While paying Cash to the BC at Branch

Dr. Current account/Overdraft account of Business correspondentCr. Cash in Hand (BC will withdraw cash for daily requirement)

2. While Depositing Cash by the BC at Branch

Dr. Cash in Hand AccountCr. Overdraft account of Business Correspondent.

3. While accepting customer deposit by BC

Dr. Overdraft account of BCCr. Customer account

4. While payment to the customer by BC

Dr. Customer accountCr. Overdraft account of BC.

The cash on hand with the BC would be reflected on the printout generated by them when

they carry out the settlement and from balance outstanding in the Overdraft account of

the BC. The Branch Managers should ensure that the limit is not breached on any date. In

case there is a need for higher limit, the branch should obtain specific permission from

their Regional Authority. Though the Bank sanctions the overdraft limit of certain

amount, the concerned Branch Manager is advised to provide need based amounts

equivalent to the average payments made by the business correspondent during the

previous month in order to ensure that idle cash dose not lie with the Business

Correspondents.


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1. The individual branch managers would monitor the cash held by the business

correspondents and as the number of BCs handled by a branch would be finite, it wouldbe easier for them.

2. The BCs can collect the cash from the link branch and also approach the link branch, incase there is a spurt in the withdrawal or if the amount of receipts is not sufficient tocover the withdrawals.

3. The link branch can monitor the transactions of the Business Correspondents closely asthe settlement accounts are maintained in their branches.

4. The cash management for the BC is easier as it is distributed to different branches and the

centralized position can be obtained in view of the core banking facility.

5. The inspecting officers who audit the link branch can also carry out surprise audit of thecash held by the Business Correspondents as the data is available at the branch whichthey are auditing.

General precautions:

Cash insurance is to be arranged by the Business Correspondent at their own cost for burglary,theft and other risks and including the cash in transit.

Business Correspondents should be trained to keep a notebook mentioning the day- wisetransactions and the closing cash and to tally the closing cash after every settlement so that thebranch officials and the inspecting officials of the bank can inspect the cash with the BusinessCorrespondents.

The frequency of tallying the amount of cash with the BC should be daily for better control and

monitoring. This would also act as a deterrent to prevent misuse of the banks cash by the

Business Correspondents.

The service provider is advised to indemnify the Bank in the event of misappropriation of funds

by the field Business Correspondents engaged by them. In such cases, the extent of money to beprovided by the Bank has to be a part of the Memorandum of Agreement between the Bank andService provider.

We have to put in place a system of monitoring the Cash at BC locations and the reconciliation

of the transactions carried out by them


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Future Trends:

a) Bank to train the Business Correspondents on fake note identification and to identifygenuine notes. This can be done at the RUDSETI type of institutions at the district level

for Business Correspondents of all Banks operating in that area.

b) In the event of BC being a shopkeeper or medical store or the petrol pump owner, theythemselves handle large amounts of cash and hence they can make payments from out oftheir own cash and get reimbursed for the cash payments made by them. Cash need notbe separately given to them for handling payments. This would depend on the extent ofpayments handled by these entities.

It is the process of comparing and matching figures from the accounting records against thoseshown in the statement of account. Therefore branches are advised to reconcile general ledgeraccount with overdraft/current account of the BC on daily basis. Similarly balance outstanding ingeneral ledger account should match with the total of balance outstanding in the individualaccounts of customers as on particular date (Balancing of books).

The transactions report should be system generated and be provided to the respective branches,in secured / protected soft copy, on branch e-mail ID on a daily basis.

Immediately after receiving daily transaction receipts from the BC, branch has to carry outverification of day wise entries generated by the system in current/Overdraft account of BC. Incase of any discrepancy matter should be taken up with service provider and BC for immediaterectification. Branch to comply with the above said procedure meticulously without fail.


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1. The Complaints and Grievances would be dealt with by the DRM of the Region under

whose area, the BCs are operating.

2. The procedure for termination of arrangement has been laid down under the head, Code ofConduct.

3. An illustrative list ofwarning signals are enumerated below:

i) Sourcing large number applications beyond the known potential of the area ofoperations.

ii) Delayed submission of applications at the branch.

iii) Complaints against the BC.

iv) Life style of the agents of the BC.

v) Irregularity in submission of transaction receipts to the link branch.

4. Immediately on receipt of the complaint, link branch should resolve the grievances andreport to Regional Office.

5. Immediately on detection of fraud a report should be sent to Regional Office and Zonal

office by the Link Branch.


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Evaluation of Risks: The key risks in outsourcing that need to be evaluated and mitigated are:

1. Strategic Risk: The service provider may conduct business on his own behalf, which isinconsistent with the overall strategic goal of the Bank.

Mitigation: Due diligence to be exercised at the time of selection and the activities to bemonitored at prescribed intervals.

2. Reputation Risk: Poor service from the service provider, his customer interaction not beingconsistent with the overall standards of the Bank.

Mitigation: Due diligence to be exercised at the time of selection process and the activitiesto be monitored. Adequate and ongoing training will also be put in place. Technology willensure standardization.

3. Compliance Risk: Privacy, consumer and prudential laws not adequately complied with.

Mitigation: All BC/BF to be trained adequately in the relevant areas.

4. Operational Risk: Arising due to technology failure, fraud, error, inadequate financialcapacity, discontinuation of business, to fulfill obligation and / or provide remedies.

Mitigation: Back up data should be maintained at a DR server. Selection process willensure that only reputed organizations are enrolled. Also, the Bank will lay down theminimum criteria for individual operators to be appointed by BC. Security deposits will beinsisted upon in the joint names of the BC and the Agent. Customers will also be educatedabout their responsibilities with respect to their accounts. Bank should insist on a suitablebusiness continuity plan be drawn, documented and made part of MOU.

5. Legal Risk: Includes but is not limited to exposure to fines, penalties or punitive damagesresulting from supervisory actions, as well as private settlements due to omissions and

commissions of the service provider.

Mitigation: The agreements with the BC/service provider should contain suitable clauses tocover this aspect.


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The below data will shown related to progress report of the financial inclusion given by the

Bank of Baroda as in 15 June 2012 of the Valsad district under BC model adopted.

Sol ID Name of the linkbranch

Name of thevillage

No ofenrolment

No of smartcard received

Transactionstarted

3044 Kaparda Khadakval 257 0 Yes

Sildha 500 85 Yes

Ozerda 235 325 Yes

Mendha 193 113 Yes

Veribhavada 314 85 Yes

1518 Palikarambeli Kalai 25 2 Yes

1868 Zaroli Anklash 40 20 Yes

0863 Valvada Borlai 30 9 YesBorigam 39 2 Yes

Kachigam 18 12 Yes

Karambela 35 1 Yes

0236 Pardi Sonwada 34 1 Yes

Nanavagchipa 10 0 No

Sondhalwada 31 16 Yes

1599 Motavaghchipa Dehli 193 0 Yes

Chival 94 25 Yes

Parvasa 199 0 Yes

Panchlai 173 16 Yes

0237 Vapi Karamkhal 21 1 YesSalvav 40 7 Yes

Kunta 33 1 No

Vatar 31 17 Yes

0251 Udwada Rehentlav 63 35 Yes

Orwad 140 37 Yes

Tighra 18 25 Yes

Motiwada 63 46 Yes

Palsana 12 20 Yes

0233 Bulsar (main) Tithal 27 10 Yes

Kanjanhari 221 120 Yes

Jujwa 58 37 Yes1594 Dandi Bulsar Kakwadidanti 66 25 Yes

Bhagal 82 23 Yes

0256 Unti Malvan 86 84 Yes

Dharsana 393 230 Yes

1166 Parnera Pardi parnera 18 13 Yes

0625 Sarigoan Manda 60 11 Yes


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Punat 10 9 Yes

Angam 5 4 Yes

1005 Phansa Kalgam 5 0 No

Karanjgam 9 0 No

1349 Dharampur Kangvi 616 728 YesKaranjveri 500 423 No

Khatana 571 512 Yes

Bilpudi 914 622 Yes

Barumal 540 312 Yes

Sidumber 815 491 Yes

Aavdha 410 513 Yes

Barsol 260 327 No

8507 5395

Interpretations:. From 2011 year onwards the implementation of financial inclusion has beenstarted. From the given data these are 48 villages with the population of above 2000 in the

Valsad district. It has been found that a total of 8057 people had enrolled in financial inclusion

through Bank of Baroda and out of these a total of 5395 has been received smart card. In this

financial year the bank has maintained transactions of Rs 3550 lacs. This was satisfactory

according to their target. From these 8 villages has yet to start a transactions through machine i.e.

handheld device.

The data given was the progress report of the financial inclusion given by Bank of Baroda. From

2011 year onwards the implementation of financial inclusion has been started. With the help of

BCs appointed by the bank the transactions of financial inclusion has been started. From the

given data these are 48 villages with the population of above 2000 in the Valsad district. It has

been found that a total of 8057 people had enrolled in financial inclusion through Bank of

Baroda and out of these a total of 5395 has been received smart card. In this financial year the

bank has maintained transactions of Rs 3550 lacs. This was satisfactory according to their target.

From these 8 villages has yet to start a transactions through machine i.e. handheld device.


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The suggestions related to the topic are as follows:

1. The execution of financial inclusion is not going according to the motto.

2. The quality under the financial inclusion does not exist.

3. The decision taken at top level management does not applicable at bottom level.

4. Bank of Baroda should increase the salary of BCA (Business Correspondence Agents) up

to Rs 3000 so that they can seriously work on financial inclusion.

5. Due to low salary the BCA jobs are not attracted.

6. Less salary demotivate the employees thus, there is high chances of losing those

vacancies.

7. It is observed that the BCs are uploading the account without completion of KYC norms.

Even the BCs are not obtaining the relevant documents, photos etc and just upload the

account.

8. In absence of clarity for introduction of financial inclusion account, the officer verifying

this accounts find it difficult for complying with KYC norms as BCs are generally

introducing this accounts.

9. The BCs and Nodal Officers are not having adequate knowledge about their job role like

importance of obtaining documents for ID proof and residents proof& importance of

maintaining registers.


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As the financial inclusion is very sensitivity issue which is technology based under BC model

helps the rural region at most. It functions like bank with the help of smart-cards and handheld

devices that carries every transaction of deposits and withdrawal. With the help of BC model the

rural peoples find it easy to work on transactions where BCA plays very important role to help

them in opening account through biometrics and banking transactions.

The quality of financial inclusion does not exist unless the BCA took their job seriously. The top

management should understand the bottom-line problem so that they can take their decision in a

proper manner. It is great work done by NABARD organization to initiate the concept of

financial inclusion under BC model in which all the banks implemented accordingly.


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www.bankofbaroda.com

www.nabard.com

www.rbi.com

www.wikipedia.com

Bank of Baroda of financial inclusions manuals
http://www.bankofbaroda.com/http://www.bankofbaroda.com/http://www.nabard.com/http://www.nabard.com/http://www.rbi.com/http://www.rbi.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.rbi.com/http://www.nabard.com/http://www.bankofbaroda.com/


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final project on financial inclusion

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