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Contribution for Inclusive Growth in India: A Case Study of Bank of Baroda

Banking is the lifeline of the Indian economy and only it has the capacity to link all the people of India by contributing their earnings and savings through banking channel which ensures them safety, liquidity, convenience of their funds along with reasonable returns unlike investing in unproductive assets like gold or falling prey to chit funds. People should also have the right to access to the scarce banking credit and other financial services at affordable cost. They need to move away from private money lenders. Even after more than 40 years of first dose of nationalization of banks intending conversion of “Class Banking” into “Mass Banking” followed by second dose of nationalization and opening of new private sector bank (since 1993), about half of the Indian Population is out of banking fold. Prior to 2008 though efforts were made by GOI and RBI for financial inclusion no visible impact was observed as number of accounts (No frill A/c.) were opened but remained dormant. A broad definition of financial inclusion was given in Rangrajan Committee report 2008, which has been accepted with certain modification by RBI. The thrust thereafter was offering credit and other financial services to vulnerable groups at affordable cost to give fillip to inclusive growth. Also financial literacy which would activate demand side from this vulnerable group to make choices of financial products is given due importance. However, declaration of Jan. Dhan Yojna by our P.M. in August 2014 offering bouquet of financial products and services gave purpose and direction to banks for moving towards inclusive growth. Bank of Baroda, the third largest public sector bank has implemented Jan Dhan Yojna in in its true spirit and action.

Certain facts about present status of financial inclusion in India even after 65 years of independence.

  1. Only about 34 percent of population is engaged in formal banking which means that about 66 percent is excluded from banking services
  2. 55 percent of all households do not have bank
  3. 97% do not have any health
  4. 61% do not have life insurance
  5. About 50% of the bank account holder use their account not even once a
  6. Countries such as Austria, Brazil, France, Mexico, U.K., U.S., & even Korea have more number of branches per population of one lac. India till 2008 had only 10% branches per one lac population (World Bank Financial Access Survey Data 2009) and in respect of percent of population with access to financial services Korea Republic Malaysia, Sri Lanka & Thailand exceed that of India (World Bank Survey 2008)


GOI has taken following steps:

  1. Creation of SBI in 1955
  2. Nationalization of commercial banks in 1969 (14 Banks) and 1980 (6 Bank) opening gates for having S.B. A/c. with balance of only Rs. 5/-.
  3. Setting targets for Public Sector Banks for lending to hither to neglected sectors of economy now termed as priority sector
  4. Lead Bank Scheme in 1970
  5. Establishing Regional Rural Banks (RRBs) in 1975 catering exclusively to rural
  6. Introducing a Self Help Group (SHG)- Bank linkage programme in 1992
  7. Formulating the Kisan Credit Card (KCC} scheme in

RBI & GOI has taken following measurement.

  • Introduction of “No Frill Accounts” in November 2005- with minimum balance, document in regional languages and overdraft facility.
  • Relaxing Know Your Customer (KYC) norms for A/c. holder with balance not greater than 50,000/-

Ration Card and voter ID as documents, Bio-metric card have been issued.

  • General Purpose Credit Card scheme-Revolving credit facility in form of General Purpose Credit Card (GCC) with credit limit of 25000/-
  • Intermediaries as business facilitator, banks could take assistance from non-government , Self Help Group (_SHGs) and micro finance institutions.
  • Business Facilitator and Business Correspondent model : ensuring door step delivery of financial products and
  • In Union Budget 2007-08, announcement of creation of two funds – Financial Inclusion Fund and Financial Inclusion Technology Development Fund for meeting the costs of development and promotional technology
  • Project Financial Literacy and Credit Counseling Cells were set-up

A broad working definition of F. I. was given by Rangrajan Committee 2008 which with certain modification by RBI is at follows:

“F.I. is the process of ensuring access to appropriate financial products and services needed by all sections of society in general and vulnerable groups such as weaker section and low income groups in particular at affordable cost in a fair and transparent mechanism.”

Following the above definition, RBI, GOI and Public Sector Banks have taken series of measure for F.I. since 2009 more prominent among them are as follows

  1. Swabhiman:- An initiative in 2011 aimed to extend to population in excess of 2000 by March 2012 with focus on bringing in deprived sections of society in banking network with availability of credit at lower rates to to be monitored by State Level Bankers Committee (SLBC). However, it reached only 74000 villages because of the following
    1. Both banks and Financial Institution services were not connected to banks CBS (Core Banking Solution) server and hence transaction details of Business Correspondents (BCs) were not captured in
    2. Government payments were not routed through no frills A/c. in such
    3. Other banking services like availing small loans, MGNREGA payments, payments, pension remittances, insurance etc. were not extended.
    4. Credit Counseling and Financial Literacy did not go hand in hand with Swabhiman
  2. GOI drawn up an action plan for comprehensive financial inclusion under mission mode to cover all uncovered households to open at least one A/c. in the name of the family head with provision of affordable financial services, financial literacy programme micro insurance pension schemes for unorganized

Progress of Financial Inclusion by Public Sector Banks as on 31st March 2014.

  1. There were 115082 bank branches of which 2% branches in rural areas
  2. There were 160055 ATMS of which 58% were in rural area.
  3. Population per branch of commercial banks has come down from 14000 in 2010 to
  4. There are more than 35 lac Banking Correspondent appointed by Public Sector Banks (PSBS) and

Regional Rural Bank (RRBs) in unbanked villages.

Prime Minister’s Jan Dhan Scheme

It is launched on 28th Aug. 2014 nationwide with particular focus to empower the weaker sections of society with following salient factures.

  • Providing basic banking accounts with RuPay debit card, overdraft facility and inbuilt accident insurance cover of Rs. 1 Lac to every household by Aug 2015.
  • The A/c. would be linked with Aadhar number of account holder and would become the single point of receipt of Direct Benefit Transfer (DBT) from Central/ State Govt. Local Bodies including LPG/GAS delivery.
  • Overdraft (OD) of INR 5000 (initially INR 1000) to be covered by  credit gurantee
  • To open about 6 crore bank accounts in rural areas and about 1.5 crore bank accounts in urban areas with proper strategies and action
  • To strengthen BC model by ensuring both operational flexibility and viability of BC agents by providing proper training about basic banking, insurance, pension products and customer handling .BCs to be financed upto INR 1.5 in rural area, INR 2 lacs in urban area and INR 2.5 lacs in Metro Center. The minimum remuneration to BC is suggested 5000/- p.m. or fixed amount and additional transaction/activity based variable component.
  • Adequate publicity be given in structured In states , Stata Level Bankers Committee (SLBC) and at local levels Lead District Manager would be responsible for campaigning through print, electronic and radio at central level and as also through posters, banners and broachers at local level.

PM’s Jan Dhan Yojna paved the foundation of Inclusive Growth.

There are twin aspects of financial inclusion: demand side and supply side. The demand side of FI include financial literacy which means making vulnerable group aware of what they can demand at competitive price and supply side of F.I. includes availability of financial market services by banks timely and at affordable rate of interest. RBI has advised banks to formulate a board approved F.I. plan for the next three years. FIPs must be integrated with normal business plans of the banks. Banks must view F.I. as a viable business model and a huge business opportunity by perfecting their delivery model. Banks need to activate their BC model, updating technological aspect through CBS (Core Banking solution) in all their branches and RRBs sponsored by them. Banks should offer a bouquet of minimum four products to account holder viz.:-

  1. A saving cum overdraft A/c.
  2. A pure savings A/c. ideally a recurring or variable recurring deposit plan
  3. A remittance product to facilitate EBT and other remittance and
  4. Entrepreneurial Credit product like a General Purpose Credit Card (GCC) or a Kisan Credit Card (KCC).

Inclusive growth or the literal meaning of two words referred to both the pace and the pattern of the economic growth. Inclusive growth allows people to “contribute for the benefit from economic growth”. Growth is inclusive when it creates economic opportunities along with ensuring equal access to them.

“Inclusion” means process of including the excluded sectors such as rural and underprivileged population of

India in the development process of economic growth.

There is distinction between direct income distribution or shared growth and inclusive growth. The inclusive growth approach takes a longer term perspective or the focus in on productive employment rather than on direct income redistribution or a mean of increasing incomes for excluded groups. While income distribution scheme can allow people to benefit from economic growth in short run, Inclusive growth allows people to contribute to and benefit from economic growth, Growth is inclusive when it creates economic opportunities alongwith ensuring equal access to them.

We cannot blame the banks alone for lack of credit penetration to the excluded segment of the society, Banks are into the business of lending, but at the same time, they need to ensure the repayment capacity of the borrower to mitigate credit risk. The NGOs must lead a mission to impart financial education training and capacity building to repay bank credit for excluded groups.

RBI through their circular dated 26th August 2014 has relaxed KYC guidelines considerately as regards identification and residential proof to include excluded people.

Financial inclusion and policy objective of inclusive growth cannot be achieved merely by banks without the active involvement of all stakeholders like RBI, other financial regulators like IRDA, governments (State and Central) NGOs, Civil, Servants etc. The Stakeholders and the entire support system should be partnering with banks in this mission.

Dr. Nachiket Mor Committee recommendations have been useful to RBI to issue guidelines to relax KYC Norms to open universal bank savings A/C, opening of Payment Banks and revising Priority Sector Norms.

In India, we have over 900 million mobile phones. Effective use of technology can help penetration of products and services in India.

Technology with its capacity to reduce transaction cost, is key to enabling large volume low ticket transactions that is the centre of financial inclusion. A good mix of technology, consumer literacy and protection provided to their funds would provide excluded group to make wide choice about banking products & services.

The journey towards 100% financial inclusion & inclusive growth is a continuous one. In a recent move on 25/02/2015, RBI has declared that overdraft up to Rs. 5000 under JanDhan Yojna would be considered under priority sector. This would put Rs. 66,000 crores into banks’ priority sector classification giving impetus to inclusive growth besides incentive to PSBs. It will also qualify as advances to weaker sections provided borrower’s household annual income does not exceed Rs. 60,000 for rural areas and Rs. 1,20,000 for non-rural areas. These declarations by RBI will give PSBs necessary relief and enthusiasm to make further contribution to achieving inclusive growth.

Financial inclusion plan progress of Bank of Baroda

Bank of Baroda India’s international bank has responded very positively to our PM’s call for financial

inclusion and RBIs concerns for inclusive growth which is evident from the following comparative date.




Month ended Dec. ’14

Month ended Nov.. 14.


Total no. of branches




Of 1 No. of rural branches




No. of branches in unbanked villager




No of banking outlets in village with

population < 2000




Total bank outlets in all villager




Basic S.B. deposit (Ant. In thousands)




OD facility available in basic S.B.

(Amt. in thousand)




KCC kiran credit card (Number)




GCC amount in thousand




Total of transaction in BC ICT (Amt. in Thousand)



In BOB there is gradual but impressive growth ar regards financial inclusion.


In comparison to some of the other Asean countries since 2000 India’s achievements are fairly modest. This_ calls for a concerted effort to make India’s growth more inclusive in the future. Several measures are outlined to strengthen the sources of inclusive growth. The main thrust of inclusive growth strategies has to be on the following key areas.

  1. Employment and growth of
  2. Increased public expenditure in education and
  3. Improved infrastructure
  4. More effective governance at all
  5. Technology as information enabler can also be used for
    1. Facilitate credit, allow credit to follow the deprived rather than lead.
    2. Reduce transaction
    3. Impart information to about 900 million mobile users through mobile banking bringing in large volume low ticket transactions and check cyber
    4. A cohesive financial literacy and awareness programme to be put in
    5. Speeding granting licenses for Payment and Small banks from among more than 100 .




  • Rangrajan committee report (2008) on financial inclusion, Govt. of India.
  • Article on “Comprehensive Financial Inclusion – Jan Dhan Scheme” by D.T. Pai in magazine” The Indian Banker” Nov. 2014.
  • Article on “Financial Inclusion for Inclusive growth in India” by Chitra Saruparia Asst. Professor, National Law University, Jodhpur.
  • PPT on “Financial Inclusion & Financial Literacy” by Deepali Pant Joshi, Executive Director, RBI.
  • “Financial Inclusion in India”- Journey so far and way forward” by K.C. Chakrabarty Deputy Governor, RBI Monthly Bulletin 2013.
  • Financial Inclusion Plan Progress of Bank of Baroda –Dec. 2014
  • “Inclusive Growth and Role of Technology Can Play in It” (Tenth R. Gadgil Memorial Lecture Delivered by Dr. Raghuram Rajan, Governor, RBI on Feb. 13, 2014 in Mumbai.
  • “Business Standard” Article dated 26th August 2014 “Prime Minister Modi asks banks to make financial inclusion as national priority”.
  • “Business Line” Article dated 26/02 2015.


Authored by:

Prof.   Bharat   Ved


MET Institute of Management, Mumbai

Global HR Trends @ 2015

Organizations today operate in a globally connected environment in the era of rapid innovation. With constant force of increasing automation and efficiency along with four different generations (and mind-sets), the whole world has become our workplace.

Today HR is confronted by the ‘Nexus of Forces’. These include:

  • Mobile workforce, Workforce collaborates through social networks, • Works in virtual teams in the cloud, • Information explosion through analytics and big data, • Widening skill gap, • Digital divide

The HR Trend Institute distinguishes eight trends influencing the domain of organisations and people in organisations.

The table below gives an overview of the eight trend areas.




The shape of organizations



Sourcing Talent



The possibilities of technology

Limited Influence

Many new possibilities created by technology, with big speed of change

Expectations of work

You mainly work for the money

People are looking for a sense of purpose in work

Can work be fun?

A division between work and fun

Work should be fun

The changing generations

Baby Boomers and Gen X

Gen Y and Gen Z

The connection between growth

and size of organizations

Growth of the business and growth of

the organization are connected

You can grow, while your organizations

stay small

Change and innovation processes

Big transformation programs

Many small experiments and incremental change

Source: Eight Trends (HR Trend Institute, 2014)


Emerging HR Trends for 2015:

The table below gives the emerging trends in the different functional areas of HRM:




Recruitment & Selection


•    Use of Social Media

•    Use of Mobile Application

•    Employee Referral Programs on rise

•    Modernized Applicant Tracking Software,

•    Use of gamification techniques for selection



Performance Management


•    Dropping off bell curve- based performance appraisal

•    On-going Performance Management

•    Decoupling compensation from evaluations

•    Continual and Collaborative approach to performance management






Training & Development


•    Blended Learning Solutions for Multi-generational workforce

•    More Management and Leadership training due to globalization

•    Embracing social Media tools

•    Mobile Learning Solutions

•    Cross – Cultural training

•    E-learning

•    Use of gamification and games

•    More Training Programs on Workplace harassment






Compensation & Benefits


•    Increase in Market research in designing compensation

•    Broader mix of total rewards

-                 Career development and growth

-                 Work autonomy

-                 Other intangible rewards

•    Focus on family and work/life balance

-                 Family leave programs

-                 Flexible work schedules (strong retention and recruiting tools)

•    Compensation plans for global workforce (expatriates)

Work place is undergoing fast-paced and dynamic changes, making the job of HR more challenging and demanding. Advancement of technology, such as the rise of cloud computing, use of social media and mobile tools is changing the way we function. Multigenerational workforce has already transformed the workplace. Acquiring, developing and retaining talent needs continuous effort. Thus it is imperative for an organization to imbibe these trends not only to improve its overall efficiency, but also to increase its ability to compete in today’s rapidly changing global market.

Authored by:

Dr. Farida Virani


Ms. Remya Ravindran  Research Assistant

MET Institute of Management, Mumbai


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