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.
MEASURES TAKEN BY RBI AND GOI FOR FINANCIAL INCLUSION TILL 2008.
Ration Card and voter ID as documents, Bio-metric card have been issued.
“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
Regional Rural Bank (RRBs) in unbanked villages.
It is launched on 28th Aug. 2014 nationwide with particular focus to empower the weaker sections of society with following salient factures.
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.:-
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.
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.
S.No. |
Particulars |
Month ended Dec. ’14 |
Month ended Nov.. 14. |
1 |
Total no. of branches |
5054 |
5002 |
2 |
Of 1 No. of rural branches |
1856 |
1839 |
3 |
No. of branches in unbanked villager |
481 |
473 |
4 |
No of banking outlets in village with population < 2000 |
17706 |
16832 |
5 |
Total bank outlets in all villager |
21946 |
21072 |
6 |
Basic S.B. deposit (Ant. In thousands) |
26988791 |
23487533 |
7 |
OD facility available in basic S.B. (Amt. in thousand) |
166576 |
166349 |
8 |
KCC kiran credit card (Number) |
1237818 |
1231214 |
9 |
GCC amount in thousand |
562906 |
549609 |
10 |
Total of transaction in BC ICT (Amt. in Thousand) |
1914199 |
1473534 |
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.
Authored by:
Prof. Bharat Ved
Faculty
MET Institute of Management, Mumbai
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:
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.
|
From |
To |
The shape of organizations |
Hierarchical |
Networks |
Sourcing Talent |
Local |
Global |
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)
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
Professor faridav_iom@met.edu
Ms. Remya Ravindran Research Assistant remyar_amdc@met.edu
MET Institute of Management, Mumbai