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Rural Banking Using cooperatives

Rural Banking Using cooperatives. By Anoop Deshpande, Advocate, Bangalore Former Managing Director, Karnataka State Souharda Federal Cooperative Ltd., Bangalore. Banking in India. In 2000 Over 70% of India’s population lived in rural areas. 3/4 th of poor Indians live in India.

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Rural Banking Using cooperatives

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  1. Rural BankingUsing cooperatives By Anoop Deshpande, Advocate, Bangalore Former Managing Director, Karnataka State Souharda Federal Cooperative Ltd., Bangalore Rural Banking Using cooperative

  2. Banking in India • In 2000 Over 70% of India’s population lived in rural areas. • 3/4th of poor Indians live in India. “India lives in villages” • But Rural India is far away from the reach of Banks. • “If a mobile telephony can reach remote villages, why can’t Banks go there?”- CEO of Bank Rural Banking Using cooperative

  3. Population per Bank *Note: Figures exclude post office deposits of Japan (35% of deposits) Rural Banking Using cooperative

  4. Population per Bank India Rural Banking Using cooperative

  5. Population per Bank India Rural Banking Using cooperative

  6. Population per Bank India Branch network of 68116 with an average population per Bank Branch of 16000 Rural Banking Using cooperative

  7. Relative share of borrowing of cultivator households Rural Banking Using cooperative

  8. Number of Savings Accounts per 100 Rural Banking Using cooperative

  9. Savings Accounts • UK 5% of population donot have bank Account • Australia 7-8% of population do not have bank account Rural Banking Using cooperative

  10. Savings Accounts India • Total 31 Crore Bank Accounts. • Excluding multiple accounts 20 crore peple have bank accounts. • 85% people donot have bank account • Pondycherry: • Literacy rate 85% • 85 branches in 264 villages • 10lakh adult population: • 6.67 bank accounts: • Actual account holders:3 lakhs Rural Banking Using cooperative

  11. Number of Credit Accounts per 100 Rural Banking Using cooperative

  12. Banking in India • Total villages in india: 6,34,321 • Only 9000 villages have multiple banks • Total 32,227 rural branches: 45% total branch network • 60% rural house holds donot have bank account • 70% marginal farmers do not have deposit accounts. Rural Banking Using cooperative

  13. Alternate banking • Agricultural Cooperative societies. • Non agricultural cooperative societies • SHG’s • RBI has also permitted commercial banks to appoint Cooperative societies & NGO’s as Business facilitators and business correspondents RBI/2005-06/288DBOD.No.BL.BC. 58/22.01.001/2005-2006 dated 25 Jan 2006 Rural Banking Using cooperative

  14. Alternate banking Initiative in Karnataka • Formation of Self help cooperatives. • Combination of SHG and cooperative society. • Collection of regular thrift. • Provision to deposit extra savings. • Lending to group from society • Lending to individual directly from society on security. Rural Banking Using cooperative

  15. Alternate banking Self help cooperative Thrift cooperative 1. Membership 2. Formation of Group Rural Banking Using cooperative

  16. Alternate banking Self help cooperative: Savings Thrift cooperative Extra savings to coop Compulsory thrift in group Rural Banking Using cooperative

  17. Alternate banking Self help cooperative: Credit Thrift cooperative Credit to group: group responsibility Credit from coop: individual responsibility Rural Banking Using cooperative

  18. Alternate banking Moving from Micro Finance to Micro Banking Rural Banking Using cooperative

  19. Alternate banking Initiative in Karnataka • More than 200 Thrift cooperative in Karnataka under KSS Act, 1997 • Many NGO’s and Governmental organs are actively promoting: • Karnataka Women and Child Welfare Department • Karnataka Water Shed development Program • BAIF • Sahachara Rural Banking Using cooperative

  20. Alternate banking Karnataka Souharda Sahakari Act, 1997 • No Government money No intervention. • Self regulation. • Responsibility to members. • Professionalism. • Truly democratically member controlled. • Elected autonomous regulatory authority. • Cooperatives are seen as business enterprises Rural Banking Using cooperative

  21. Cooperatives in India Rural Banking Using cooperative

  22. THANK YOU Rural Banking Using cooperative

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