Basic Banking Services Research Articles

Role of District Central Cooperative Banks in Financial Inclusion: A Study on Two Selected Districts of West Bengal

Financial inclusion provides the legitimate provisions of basic banking services with adequate financial securities to the unbanked population at a reasonable cost. Since the early decade of the 20th century, the cooperative system has been engaged to percolate financial inclusion in various strata of our society. Several initiatives regarding financial inclusion have been implemented in the post-independence period; however, the Pradhan Mantri Jan-Dhan Yojana (PMJDY) 2014 has been considered as one of the most fruitful and effective initiatives by the Government of India for opening no-frill bank accounts with zero balance facilities for financially excluded people in our country, and the cooperative banks have been playing a vital role in the process of implementing the said Yojana. The present study, based on Hooghly District Central Cooperative Bank (HDCCB) and Burdwan Central Cooperative Bank (BCCB) of West Bengal, has comprehended to investigate the role of the DCCBs in the process of financial inclusion with respect to a number of financial operations and annual changes of savings accounts over the second decade of the 21st century. The study has identified statistically significant segments of the financial operations. Those segments are consequences of several fluctuations in financial operations due to the changes in banking policy, implementation of PMJDY, demonetisation, loss of agriculture production, adverse effects of COVID-19 and also the national economic downturn. Finally, it has been observed that the implementation of PMJDY significantly gave rise to the business of the HDCCB and also acted as a threshold point of financial inclusion than its counterpart in the Burdwan district of West Bengal.

The Right to Use Cash: A Case Study of India

India is facing a shift towards a cashless society using alternative methods for payment transactions based on electronic and digital means. It is a country with the fastest growing economy in the world and a heterogeneous population. The country's digitalisation of money transactions is growing and is applied in all government transactions and has taken a big leap in many spheres of its operations, which brings inclusiveness in society. The important motives behind this is to provide basic banking services to hitherto unbanked masses and to curb black money, tax evasion and the threat of terrorism. However, the peripheral parts of the society like, poor, elderly, physically challenged and others may be deprived of the benefits of financial systems due to their limitations in benefitting from the digital transformation. A cashless society may not be in the interests of these groups and it may result in social exclusion rather than inclusion. However, consumers need to have the right to choose their preferred payment method and there should be adequate availability of cash and ATMs. Eliminating cash would have negative consequences and may have adverse effects on these populations. This paper takes a look into the aspects of the right of the public as a consumer in choosing cash as the payment method of her convenience and choice.

TRIMMING DOWN POVERTY THROUGH MICROFINANCE IN PAKISTAN

Microfinance refers to the provision of financial services, such as loans, savings, insurance, and other basic banking services, to individuals and small businesses in low-income or developing communities who have limited access to traditional banking services. Microfinance aims to alleviate poverty, empower marginalized communities, and promote economic development by providing financial resources to those who would otherwise be excluded from the formal financial sector. Credit does not play a direct role in poverty reduction; instead, it increases the borrowers' income so that they can be socially uplifted. This study was conducted to find out the role of microfinance in eradicating poverty in Pakistan. Punjab Rural Support Program (PRSP) provides small loans in the rural areas of Pakistan. In this study, three variables, credit, education, and family size, are taken as independent variables, while the borrowers' income is taken as the dependent variable. Data was collected from the rural areas of Tehsil Gujrat to project the impact of small credit. The study also presents some policy measures like expanding the outreach, increasing the amount of credit, etc, given, so that maximum benefits can be dropped to the last end.

Pradhan Mantri Jan Dhan Yojana and Financial Inclusion of Female Domestic Workers in Mumbai

The Pradhan Mantri Jan Dhan Yojana, launched in 2014, is an initiative toward 'Universal Banking Access,' to ensure that every household in the country has access to basic banking services. The paper discusses the effect of the PMJDY on the 'financial inclusion' of female domestic workers in Mumbai, who remain on the periphery of regular banking services. The study considers financial literacy, access to financial services, and the ability to make good decisions as metrics of financial inclusion based on a cross-sectional survey conducted among the population. Though the majority of the respondents have opened bank accounts either under PMJDY or traditional banking systems, financial literacy remains a huge challenge to the effective utilization of those accounts. While there is an increase in savings and a shift towards more formal means of financial management, low confidence in managing financial matters and social barriers get in the way of the empowerment of such women. Special interventions in terms of targeted financial literacy programs and social interventions are needed to fill such gaps if economic stability and autonomy are to be enriched for urban female domestic workers, as seen in Mumbai.

Multi-channel distribution in the banking sector and the branch network restructuring

European banking groups have been addressing the problem of restructuring their branch networks. Indeed, in the light of the recent digital transition of services, they aim to leverage digital channels to deliver basic services and reduce the number of physical facilities to dedicate to more complex and added-value operations. In order to implement the new business model, banking groups are shrinking their internal branch networks and outsourcing basic services to maintain physical proximity to customers unwilling to adopt digital channels. This work aims to formulate a mathematical programming model to support the decision-making process concerning the branch network restructuring. The model is formulated as a hierarchical covering location problem. Three types of branches providing different categories of services are considered. They are organized according to a three-level hierarchical structure, and each level is associated with a covering radius, representing the related accessibility condition to be guaranteed to users. A further category of facilities is considered, namely external facilities, that may support internal ones in providing basic banking services. The objective is to identify the network structure able to serve all the demand for banking services and minimize the total costs. A specific parameter is introduced to regulate the maximum outsourcing level that the bank is willing to achieve. The model is tested by considering a real case study concerning one of the main banking groups in Italy. The obtained results show the capability of the model to provide interesting scenarios and fruitful managerial implications.

Issues And Challenges Faced by Small Finance Banks in Debt Collection with Special Reference to Rural Areas - A Conceptual Study

The Reserve Bank of India (RBI) created Small Finance Banks (SFBs) in 2015 to encourage financial inclusion and offer banking services to underserved populations. Small business units, micro- and small businesses, farmers, and low-income households are just a few examples of the unbanked and underbanked groups of the population that SFBs primarily target with basic banking services. SFBs are nevertheless vulnerable to non-performing assets (NPAs), which can arise for a number of causes, just like other banks. SFBs use a variety of strategies, such as effective credit appraisal and monitoring, quick recovery actions, loan restructuring, and legal action against defaulters, to manage and reduce their NPA levels. To maintain compliance with prudential norms and protect stability, the RBI supervises and conducts routine inspections of SFBs.

Customer Awareness Towards e-Banking Management for Maintaining a Sustainable Environment

Objective: The financial sector and banking support the economy as a whole. The objective of this study is to determine the extent to which consumers are conscious of the benefits of e-banking, the role of demographic factors in determining their satisfaction with e-banking, and the overall satisfaction level with bank services. Theoretical Framework: The study focuses on the financial sector and banking, exploring how private sector banks in India fulfil statutory and regulatory obligations while providing basic banking and para-banking services. Method: The research incorporates both primary and secondary sources and includes three public banks in Kerala, India: Bank of India, Indian Bank, and Union Bank of India. Each bank is considered a separate population, and a sample of 513 bank customers is selected from each region. The Cochran sample size calculation formula is used to determine the appropriate sample size. Statistical analysis, including multivariate analysis of variance and chi-square tests, is conducted using the Statistical Package for the Social Sciences (SPSS). Results and Conclusion: The findings indicate that bank consumers are satisfied with the e-banking environment and management. Implications of the Research: The research has implications for the banking industry, highlighting the importance of e-banking and demographic factors in customer satisfaction. The findings can inform banks in improving their electronic banking options and overall service quality. Originality/Value: This study contributes to the existing literature by examining consumer satisfaction with e-banking specifically within the context of public banks in Kerala, India.

Financial Inclusion is Rapidly Growing but the Access to Financial Services Remains Modest

Financial inclusion refers to people’s ability to hold a current account with a bank. The degree of financial inclusion is measured by the share of individuals and businesses that use the financial services offered by banks and other financial institutions. Financial inclusion has become extremely relevant among financial sector operators and supervisory authorities as a mean to evaluate both growth and development potential and to guarantee adequate controls to safeguard the stability of the system. Interest in this topic has also been growing because it is included in the UN’s sustainable development goals (the 2030 Agenda for Sustainable Development). This note intends to identify where countries currently stand in relation to the inclusion target, with a focus on Central, South and Eastern European (CESEE) countries, by using the new data from Global Findex, updated by the World Bank in July 2022. The Global Findex is a vital source of data that is only partially used here to evaluate the degree of diffusion of accounts and basic banking services (deposits and credit) in the CESEE sample. Financial inclusion had improved further by 2021. In many countries, it has become very high and is now at the level of major high-income countries. Most of the unbanked are still concentrated in a few Asian countries. Digital payments strengthened in all regions, especially in Asia. However, the gap between ownership and utilisation of credit and debit cards remained large in 2021, suggesting there is a need to further incentivise use. Customers often have an account but still prefer to use cash. Ownership is not utilisation. The UN’s Sustainable Development Goal could realistically be reached by 2030, but now it is necessary to improve financial education and digital literacy to encourage more effective and extensive use of financial accounts. Nevertheless, the ample diffusion of financial inclusion can be reached mainly with a more even income distribution, in all countries and in all the different development models which are spreading in the world.

Payment Banks – A Step Towards Connecting Technology and Financial Access

Payment Banks are the part of digital revolution in Indian banking system. They present an exciting opportunity of financial inclusion. On the recommendation of Nachiket Mor committee (2013), RBI initiated to establish this differentiated bank variant to promote green banking and also to ensure the access of basic banking services to each and every Indian citizen. With the growing penetration of smart phones, mobiles and internet, Indian people are also becoming tech savvy in every field.Banks have also switched over from conventional banking practices to modern banking practices by making all transactions via mobile phones & ATM’S. So, Payment Banks is a disruptive innovation. This paper is all about what are Payment Banks?, RBI guidelines related to PB’s, hurdles involved in their operation and suggestions to improve their performance required information has been collected from newspapers, RBI guidelines and previous published research articles. PB’s are fully equipped with technology and are expected to fulfil the dream of Inclusive India.

Digital Citizenship, Digital Banking – Digitalization Proposals by the Hungarian Banking Association : From basic banking services to mortgage loans, or how to apply for a mortgage loan in 15 minutes instead of 15 days

We present through the proposals of the Hungarian Banking Association (the ‘Association’) how further digitalisation of the individual steps of banking processes and the adoption of international good practices would improve customer experience, as well as the tools by which the banking sector could be made more competitive in international comparison. By following up on these proposals, the turnaround time of a standard mortgage loan application could be reduced from the current 15 days to only 15 minutes. Ideally, it would take such a short time for the binding bank offer and the draft loan agreement to arrive in the client’s electronic mailbox. Redesigning processes would simplify the use of other banking products and services, too.

A Study on Customer Awareness and Usage of Payments Bank and Neo banks in Chennai City

The banking and financial sector has evolved over the years to meet the changing needs of the economy and industries, leading to the birth of innovative financial instruments. The Reserve Bank of India introduced payment banks to promote digital, paperless, and cashless banking in the country. Payment banks offer basic banking services to unbanked and underbanked individuals, particularly migrant workers and those from lower-income households, and bring them into the formal economy. The trend towards digital payments and net banking has increased, especially after the impact of demonetization and the COVID-19 pandemic. Neo banking is a fintech-powered concept that operates entirely in the virtual space. Technology has become crucial to satisfy customer demands, leading to the emergence of payment banks and neo banks. Despite their growing importance, research on payment banks and neo banks in India is limited. This paper aims to study customer awareness and usage of payment banks and neo banks in Chennai city.

Financial Inclusion in India: A Regional and District Level Analysis

Financial Inclusion aims at including all sections of society into the ambit of basic banking services. Since 2005, RBI has made several efforts to enhance financial inclusion across India. The study has analyzed the progress of various parameters of financial inclusion in all six regions of India from 2000 to 2018. The research also attempts to analyze the degree of relationship between financial inclusion and social development variables in India with the help of multiple regression models and Dummy variables. The result of the research unveils that literacy rate and urbanization are significant factors whereas the population is found to be an insignificant factor in determining the level of financial inclusion. The study concludes that the south region leads in all the parameters of financial inclusion in all the years and the northeast region remain on the lowest scale.

Bank branch outreach and access to banking services toward financial inclusion: an experimental evidence

PurposeBoth branch and automated teller machine (ATM) are playing a crucial role in banking coverage expansion in India. People prefer to go to an ATM for withdrawal of money rather waiting in a queue for hours at a branch. Without the existence of a full-fledged brick-and-mortar branch, ATM also plays an important role by providing basic banking services. In India, a significant part of the population is excluded from banking access. The present study aims to investigate how the branch and ATM penetration influence financial inclusion.Design/methodology/approachThe study covers the period from 2008–2009 to 2019–2020. With the application of Welch'st-test, a comparative study is being conducted between branch and ATM. Further, with the application of regression analysis, the study analyses how the branch and ATM network expansion influence financial inclusion.FindingsThough in recent times customers prefers to visit an ATM and its growth rate is higher than branches, the study found no significant differences between the growth of branch and ATM. Further, results of regression show both branches and ATMs have significant impacts on financial inclusion.Originality/valueIn micro concept both have a common role in respect of service provided to customers. While in macro concept a list of specific services can be provided through branch level only. This study has a significant role, considering the importance of branches or ATMs and cost of installing a physical branch.

Development of financial technologies in Ukraine under war conditions

This paper focuses on and analyzes such relatively young field of development as financial technology in Ukraine and its development during the war. The main advantages and disadvantages of these innovations, as well as prospects and problems of attracting investment and industry development in Ukraine are identified. The impact of digitalization on the development of information technology in Ukraine and the need to encourage and invest in the development of online banking platforms are investigated. The most attractive areas of financial technologies for investment by foreign investors and the level of their confidence in the Ukrainian financial market are studied. The impact of hostilities on the country's economy and the development of financial technologies are assessed. Development and functionality of such phenomenon of financial technologies as neobanks are considered. Advantages and disadvantages of non-banks over conventional banks for customers and, as a result, increased efficiency in the use of available resources are determined. The emergence of phenomenal financial technologies in Ukraine such as online banking and their role in the financial sector of Ukrainian banking is investigated. The main advantages and disadvantages of this development and the impact on the lives of users are identified. Development of the Ukrainian online bank Monobank and the result of the introduction of this innovative technology in the Ukrainian market are considered. The role of the National Bank of Ukraine in the development of financial technologies and the implementation of projects and strategies and the introduction of modern approaches to the regulation of the financial innovation market are defined. In addition to attracting more customers, an important factor in successful banking is high competitiveness due to advanced financial technologies. Despite the low financial literacy of the population in the early 2000s, this indicator began to grow significantly with the large-scale introduction and development of information technology in Ukraine. There is currently strong support for the digitalization of basic banking and legal services, especially among the younger generation. This is the main impetus for the development of fintech in Ukraine today and in the future. The course of active hostilities has significant impact on Ukraine's economy, which complicates many processes. But this does not pose critical threat to the work of IT professionals and the banking sector. The development of financial technologies has gained momentum, which will only increase.

Improving financial literacy of the population by the example of using basic banking products and services

Improving financial literacy of the population by the example of using basic banking products and services

Geographic and Temporal Access to Basic Banking Services Offered through Post Offices in Wales

Access to ‘universal banking services’ through the post office network has been a goal of the UK governments over the last twenty years. Various policies and mechanisms have been put in place in an attempt to maintain national geographical coverage with access points while increasing the financial viability of the network. One such mechanism is represented by the six official criteria for access to post offices, expressed as a percentage of the UK population living within one mile, three miles, and six miles of a post office. The method for calculating compliance with these access criteria is not published. Nor will any granular results be published, but only an annual statement that the criteria are being met. This article examines geographical and temporal access to post offices in order to understand the territorial coverage of the network and the impact this has on the provision of basic banking services. The area under investigation is Wales, for which we are reviewing the Government’s official access criteria. Through the Post Office Ltd website, we are collecting up-to-date information on the locations and opening hours of post offices in Wales. In addition, a detailed population grid is combined with calculated areas of equidistant geographical access, called isochrones, to determine the number of people who have access to the post office network. The isochrones are based on the Welsh road network and are calculated for different travel modes and thresholds using a powerful routing engine. Our results show that the official access criteria are largely unmet in Wales. In addition, and in contrast to previous studies, we show a rural-urban divide not in terms of spatial access, but in the combination of spatial and temporal access. The results are of both practical and theoretical value and will hopefully inform policy makers.

Evaluation of the Level of Financial Inclusion among Businesses from the Next 11 Group of Countries

The purpose of the article. The article aims to evaluation which factors are a barrier to financial inclusion in the Next 11 countries. The research aim of this article is to assess the differences in the degree of financial inclusion of business entities from the Next 11 group of countries by taking into consideration the use of basic banking services such as bank accounts, credit lines and loans.
 The hypothesis of the article. The authors put forward the hypothesis that in poorly developed countries, to which the Next 11 countries belong, there are considerable areas of financial exclusion among businesses, in particular among small and medium-sized enterprises. In most of these countries, corporate financial inclusion rates are below the global average.
 Methodology. The article applies the following research methods: a critical analysis of the literature in the theoretical part; and desk research analysis (that is analysis of data gathered) in the empirical part. Research into the degree of financial inclusion in Next 11 countries was conducted on the basis of indicators of the use of banking services by enterprises operating in Next 11 countries.
 Results of the research. The level of companies’ financial inclusion depends above all on the degree to which they make use of bank accounts and bank loans. Countries in different geographical locations vary in terms of economic and technological development and social awareness, which impacts on their participation in the use of banking services.
 Analysis of the basic indicators of banking services availability showed that there is a widespread problem of financial exclusion for companies in Next 11 countries. The proportion of companies possessing a current bank account was below the average of all countries worldwide. However, the worst situation exists in the field of financing business activity using foreign capital. Credit lines there are used on average by less than 25% of companies. However, Next 11 group countries do not see the lack of available credit lines as the main barrier to development.

FINANCIAL INCLUSION THROUGH MICRO FINANCE

Finance has become an essential part of an economy for development of the society as well as economy of nation. World leaders are embracing nancial inclusion at an accelerating pace, because they know that an inclusive nancial system that responsibly reaches all citizens is an important ingredient for social and economic progress for emerging markets and developing countries. Despite the political tailwind, half of the working-age adults globally – 2.5 billion people – remain excluded from formal nancial services. Instead, they have to rely on the age-old informal mechanisms of the moneylender or pawnbroker for credit or the rotating savings club and vulnerable livestock for savings. The pandemic has had a momentous impact on economies and societies around the world. At the same time, it has shown that, with the right approach, it is possible to protect and safeguard the economy. . Through Financial inclusion we can achieve equitable and inclusive growth of the nation. Financial inclusion stands for delivery of appropriate nancial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services. It helps in economic development as it widens the resource base of the nancial system by developing a culture of savings among large segment of rural population. Further, nancial inclusion protects their nancial wealth and other resources in exigent circumstances by bringing low income groups within the perimeter of formal banking sector. Financial inclusion engages in including poor people in the formal banking industry with the intention of securing their minimal nances for future purposes. Micronance has become a medium of extending nancial services to unbanked sections of population. Micronance is banking the unbankables, bringing credit, savings and other essential nancial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufcient collateral. In a country like India with almost 30% (more than 360 million) people still below poverty line and according to latest census gures, more than 70% or 840 million people living in rural areas with little or no access to formal banking and other nancial services, micronance has a big role to play in order to bridge this gap. The Micro Finance Institutions occupies key position in nancial inclusion through micro nance where the exclusion. In developing countries, the growth of micronance institutions (MFIs) which specically target low income individuals are viewed as potentially useful for promotion of nancial inclusion. Even though MFIs at present, mainly offer only credit products; as they grow, they are likely to expand their product range to include other nancial services.

Shunning Banks or Depending on Them? Crypto Markets and the Rise of Crypto-Friendly Banking

Abstract Often touted as the opposite of money and banks, crypto-assets and their ecosystem may gradually be coming to terms with the idea that their success will also depend on their issuers’ readiness to adhere to conventional financial practices, on their acceptance of the preponderant role that banks have to play in the financial system, and on their ability to access basic banking services. Some within the banking community are starting to reciprocate the attention, by positioning themselves so as to serve the needs of crypto assets and their ecosystem, as a promising source of revenue at a challenging time for bank profitability. No less important for the emergence of crypto-friendly banks than the risk appetite of existing or new banking service providers is the regulators’, supervisors’ and policy makers’ stance vis-à-vis crypto-friendly banking. This paper explores the relationship of dependency between crypto and banks, how some banks around the world are facing up to the challenge of serving crypto-assets and their holders, and how policy makers, regulators and supervisors in Europe and elsewhere may want to position themselves vis-à-vis the incipient phenomenon of crypto-friendly banking.

Antecedents and Extent of Financial Inclusion : A Cross-Sectional Study

According to the latest study by World Bank on financial inclusion, globally 31% of people are excluded from access to formal financial services. But despite growth in account ownership, inequality persists. The objective of the present study was to examine the current status of financial inclusion and to further explore the factors leading towards the lower level of financial access among the households. The study was conducted in four districts of the National Capital Region in India namely, Ghaziabad, Noida, Gurugram, and Faridabad, with a sample size of 300 respondents between the period of 2018 – 2019. The study is unique in nature, as the survey was conducted both in rural and urban areas. The factor analysis technique was applied to explore a large set of variables into few factors affecting the financial inclusion. Further, the households were grouped into three degrees on the basis of their financial behavior and attitude. Finally, the study concluded that supply-side and demand-side factors were the main factors for the lower access to basic banking services. Furthermore, financial attitude, financial knowledge, and financial behavior were the factors shaping the minds of the respondents. The results revealed that majority of the respondents fell under Degree 1, that is, having access to banking products, but their level of financial literacy and active usage of bank accounts was significantly low. Therefore, it is concluded that though a sufficient number of people had a formal bank account, there existed a low level of financial literacy due to which they were not active users of financial services.