Financial Inclusion Current Affairs

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Odisha becomes first state to adopt SHG based financial inclusion model

Odisha became the first state in the country to adopt Self Help Groups (SHG) based model for financial inclusion model to extend banking services in the unbanked areas through SGHs.

In this regard, state government has inked agreement with the State Bank of India (SBI). The SHGs formed under the Odisha Livelihood Mission (OLM) will be eligible to provide banking services.

Key Facts
  • The agreement assumes significant as 70% of the gram panchayats in the State do not have brick and mortar bank branches.
  • As per the agreement, OLM will function as corporate agent and around 3 lakh SHGs operating under it will be the banking correspondents (BCs).
  • In the first phase SHGs will be engaged as BCs in around 1000 remote GPs in scheduled areas having no banking facilities.
  • Gradually in later phases, it will be extended to 4000 non-banked GPs. Subsequently entire State will be covered under the financial inclusion programme.

About Odisha Livelihoods Mission (OLM)

  • Odisha Livelihoods Mission (OLM) an autonomous society of Department of Panchayati Raj of the state government. It commenced its operations in 2012.
  • It is successor of Orissa Poverty Reduction Mission (OPRM) launched in 2006 to implement various poverty reduction programmes in the state.
  • OLM presently is implementing both National Rural Livelihoods Mission (NRLM) and National Rural Livelihoods Project.
  • Odisha was the first state in the country to launch NRLM in its bid to bring down rural poverty by promoting diversified and gainful self-employment to the rural poor.
  • OLM aims at: (i) Mobilizing all poor households into functionally effective SHGs and their federations (ii) Enhancing their access to bank credit and other financial, marketing and technical services (iii) Building their capacities and skills for sustainable and gainful livelihoods development; (iii) Converging various schemes for efficient delivery of economic and social support services to poor with optimal results.

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Andhra Pradesh Government launches AP Purse mobile app to promote digital transactions

Andhra Pradesh Government has launched AP Purse mobile application to promote digital transactions among the people.

It was launched by Chief Minister N Chandrababu Naidu in Vijayawada to solve the cash crunch problem in the state following demonitisaton of high value old currency notes. 

Key Facts
  • The application features 13 mobile banking and 10 mobile wallet options. Using this application people can pay their bills and carry out their cashless transactions.
  • Besides, Government will rope agents named ‘Marpu Nestam’ to improve digital financial literacy among people. They will be provided with incentives.
  • Engineering students will be encouraged to train people in mobile banking transactions using several wallets. This would help the students to earn while learn.
  • State government introduced cashless transactions at fair price shops and completed 70% of transactions using Aadhaar linkage to provide relief to people suffering from shortage of small currency.

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Airtel launches India’s first Payments Bank service in Rajasthan

Airtel Payments Bank Limited or Airtel Bank became the first payments bank in the country to launch live banking services in Rajasthan.

The pilot phase of the Airtel bank launched in Rajasthan aims at testing systems and processes ahead of a full scale pan Indian launch.

Key Facts

  • Airtel Payments Bank is a subsidiary of Bharti Airtel Limited. Mahindra Bank holds 19.9% stake in it.
  • Airtel retail outlets across Rajasthan will act as banking points. They offer a range of basic, convenient banking services as per Payments Bank guidelines issued by RBI.
  • Customers can open bank accounts by using Aadhaar based e-KYC. Airtel subscriber’s mobile number will function as a bank account number.
  • The bank will accept deposits not exceeding Rs 1 lakh. It cannot perform lending activities, except while giving loans to its employees on approval of the board.
  • It intends to give an interest rate of 7.25% per annum on deposits in savings accounts.
  • It will be offering customers the convenience of cashless purchase of goods/services using their bank accounts/wallets, contributing to of financial inclusion and banking for all.
  • Though payment banks are allowed to issue debit card facility, but Airtel Payments Bank will be not offering this facility right now.

Background

In August 2015, RBI had had given in-principle approval to 11 applicants to set up payments bank by February 2017. So far, out of these 11 applicants, Tech Mahindra Ltd, Cholamandalam Investment and Finance Co, and billionaire Dilip Shanghvi have opted out.

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