INTERNATIONAL JOURNAL OF BUSINESS, MANAGEMENT AND ALLIED SCIENCES (IJBMAS) A Peer Reviewed International Research Journal www.ijbmas.in ISSN: 2349-4638 Vol.5. Issue.S1.2018 Financial Inclusion for Inclusive Growth – A Case Study of Utkal Grameen Bank (UGB) Dhiroj Kumar Panda1 M.Phil Scholar Rajendra Autonomous College, Bolangi E mail id: [email protected] Rajlaxmi Barik2 M. Phil Scholar Gangadhar Meher University E mail id: [email protected] Abstract Finance has become an integral part for the development of the society as well as economy of the country. Proper utilization and mobili- zation of finance is necessary for the inclusive growth and it can be possible through financial inclusion. Financial inclusion is a bold step taken by government of India to include the financially excluded people in to the financial boundary of the economy. And this can be achievable only through the cooperation of all banking institutions like commercial banks, Regional Rural Banks (RRBs) etc. The RRBs plays a significant role in the development of the rural people through financial inclusion which helps for inclusive growth and sustainable development. Financial inclusion is a process of ensuring access to suitable financial products and services needed by sus- ceptible growth such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream financial intuitional players. The study focus on the importance of financial inclusion in rural areas and through light on the steps taken by the Utkal Grameen Bank (UGB) and various strategies adopted to strengthen the financial inclusion. UGB has operates in 17 econom- ically backward districts all over the state having 57% of the total districts. Utkal Grameen Bank (UGB) is a door step bank to provide financial and banking services to the rural people like village artisans, small entrepreneurs, landless and tenant farmers, weavers etc. This banking institution helps them by providing credit facilities. The development of a country’s economy always depends upon the devel- opment of rural areas. So the objective of economic planning can never be achievable unless and until we uplift the economic conditions of rural poor people of India. This study is based on secondary data collected from annual reports of UGB, reviews of print literature and visit to the head office of UGB. Financial performance of UGB in rural areas has been analyzed with the help of key parameters like Saving Bank Accounts, PMJDY, Zero Balance Account, Mobile Seeded and Aadhar Seeded in rural as well as urban areas. The study found and concluded that UGB plays a significant role for sustainable development and inclusive growth through financial inclusion. Keywords: Financial Inclusion, UGB, Inclusive Growth, Sustainable Development, PMJDY participation is essential for the economic growth. In other words 1. Introduction inclusive growth as a strategy of economic development should not only aim at equitable distribution of growth benefits but also at When the economy development is focus on the sustainable de- creating economic opportunities along with equal access to them velopment there must be attempts to include maximum number of for all. participation from all the section of the society. But due to lack of For attaining the objectives of inclusive growth there is a need for awareness and financial literacy among the rural population it resources and for resources generation and mobilization financial cannot be possible. Central Government is trying to make attrac- inclusion is required. Financial inclusion plays a very crucial role tive for institutions to offer banking services to everyone, as it is in the process of economic growth. Financial inclusion is a part of as important as the other basic necessities of life. It is necessary to inclusive growth as it focuses on delivering financial services at equal distribution of wealth for inclusive growth. India has for a much affordable costs to the under privileged sections of the so- long time, recognized the social and economic imperatives for ciety. inclusive financial inclusion and has made a huge contribution India needs inclusive growth in order to attain rapid and discip- towards economic development by finding innovative ways to lined growth. Inclusive growth is necessary for sustainable devel- empower the poor. opment. Achieving inclusive growth is important and is one of the As per the planning commission of India, the term “inclusive” biggest challenges for the nation. The challenges to take the level should be seen as a process of including the excluded parts whose Proceedings of International Seminar on “Recent Trends in Management, Commerce & Social Sciences-2018 (RTMCSS-18)” on | 86 | 20th September, 2018 Organised by Rourkela Institute of Management Studies (RIMS), Rourkela. Int.J.Buss.Mang.& Allied.Sci. (ISSN:2349-4638) of growth to all sections of the society and to all parts of the socie- Rao and Rao (2014) have made a recent study on the perfor- ty and it can be done through Financial Inclusion. mance of RRBs in India in general and Andhra Pradesh Grameena Vikash Bank (APGVB) in particular. This paper is highlighted the 2. Review of Literature vital role that RRBs provide for the development of rural and agri- Research work cannot be completed without the in – culture sectors and is followed by detailed analysis of the perfor- depth study of the earlier researches. Prior research work not only mance of APGVB. The commendable performance of APGVB is provides guidance but also throws light on the direction in which pointed out. The need for expansion of the activities of APGVB any new research must proceed. The researcher has to tries to scan and other RRBs for the faster, inclusive and sustainable develop- the all literature available from various sources so as to determine ment of India has been pointed out. the objectives and methodology of the current research work. A Patnaik (2015) analyzed that only 13.8% of the responded in number of studies have been reviewed with intend to understand Bhubaneswar have access to bank accounts and of the total re- the research methodology. There had some of the review of litera- sponded who do not have bank account due to various reason are tures which has been previously undertaken in the field of Finan- alarmingly are not aware of PMJDY scheme. Almost male 78.9% cial Inclusion presented in an ascending chronological order: and in 90.08% were not aware of the scheme. The study con- Hemlata & Poonam Sing (2009) studied on “financial inclusion cluded that the banks should make more effort in creating aware- through Regional rural bank” they have analyzed the micro level ness on zero balance account and should aggressively campaign data on RRBs related to manpower development, saving mobiliza- for such scheme. tion, credit disbursement, micro financing in post merger period. Sahoo et al. (2017) attempted to study the determinants of finan- The study recommends that RRBs should extend their services in cial inclusion in two tribal populated districts namely Bolangir and to unbanked areas and increase their credit deposit ratio and there- Mayurbhanj in Odisha. He has investigated 300 households of two by play special role in financial inclusion. districts and found that largest share of the tribal population (71%) Gupte R. et al (2012) attempted to devise a financial inclusion is not involved in any kinds of SHG related activities. The study index which could measure both the extent and impact of financial recommends that the Indian Policy Agenda should focus on de- inclusion and strategies devised for the same. He has taken up four mand side factors along with the supply side factors in order to dimensions for computation of FII (financial inclusion index) i.e. development poorest section of the poor economy. Outreach, usage, ease of transactions and cost of transactions. For Research Gap the purpose of calculations and construction of FII, the maximum There have been many research conducted in India but a and minimum values are set to the actual observed maximum and few studies have been conducted in relation to Regional Rural minimum values of the indicators from 139 countries. In the paper, Bank and UGB of Odisha. After implementation of PMJDY the author has also studied the initiatives being taken by the Gov- scheme a few study have been conducted on UGB in relation to ernment of India for the achievement of this Millennium Devel- Financial Inclusion. To cover this research gap, the researcher has opment Goal of financial inclusion and has tried to categorize chosen this topic for research study. them into initiatives impacting outreach (SHGs, KCCs, opening Relevance of the Study bank branches in unbanked areas & Micro-finance Institutions) The study on financial inclusion and inclusive growth is and initiatives impacting ease & cost of transactions (No frills a great importance in the present day situations. Active participa- A/Cs, relaxing KYC norms, BCs, EBTs, Biometric ATMs & tion of each and everyone from each part of the society in the GCCs). financial system of the country is prerequisites for the effective Chauhan A (2013) attempted to study the overview of financial functioning of financial system. Financial system facilitates the inclusion in India by making comparison between India and some needs of those who need money and those who have surplus mon- other selected countries regarding number of branches, ATMs, ey. Banking habits is the simple way to enter in to the financial bank credit etc. to identify India’s position regarding financial system as well as financial inclusion. Therefore the study analyzed inclusion as compared to other selected countries. The author also the financial inclusion practices by UGB in rural areas. attempted to know the various strategies adopted by RBI for 3. Objectives of the Study strengthening the inclusion and the steps taken by banks to streng- To find out the steps taken by the UGB in the area of fi- then financial inclusion with the help of a case study of Axis Bank.