The Union Bank of India attempted to change the old order of financial inclusion by replacing it with new: prime focus came on household coverage, accounts with micro-credit, RuPay card and financial literacy, empowerment of women, thrust on fixed point Banking Correspondents, Direct Benefit Transfer (DBT) and finally an integrated approach to delivery of banking, insurance, pension services to all disadvantaged and vulnerable groups.

A major boost to the efforts of Union Bank came with the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY) in August 2014, which was a game changer.

It accorded Union Bank an opportunity to create a demand for financial inclusion as compared to earlier efforts of addressing issues only from the supply side.

Challenges

• Poor financial literacy and awareness about banking products.
• High cost and poor implementation of technology.
• Short-term view of banking.
• Inactive zero-balance accounts.
• Poor role of Banking Facilitators and Banking Correspondents.
• Lack of micro-products like micro- loans, micro-insurance etc.
• Poor focus on women empowerment and channelising of various government benefits/subsidies.

Solution

In the wake of PMJDY, Union Bank added 58.21 lakh accounts since its launch having balances of Rs 858 crore as on 31 March 2016 (mobilised low-cost deposit of Rs 505 crore during 2015-16. Other achievements include:

• Aadhaar seeding is done in 29.95 per cent accounts.
• RuPay cards are issued in 95.06 per cent accounts.
• Up to 31 March 2016 total 1.29 lakh accounts are opened through e-KYC facility under PMJDY.
• The 60.75 per cent zero balance PMJDY accounts as on 31 March 2015 are reduced upto 26.23 per cent as on 31 March 2016.
• PMJDY Overdraft of Rs 5,000 has been disbursed in 7,533 accounts amounting to Rs 163.54 lakh.
• Under Atal Pension Yojana, total enrollments stood at 50,057; under Pradhan Mantri Jeevan Bima Yojana, 11,05,509; and, Pradhan Mantri Suraksha Bima Yojana, 26,57,974 enrollments.
• Under MUDRA, loans amounting to Rs 1,841 crore were disbursed.
• The cumulative disbursement under micro-loans is Rs 2,592.76 crore under BC Model to SHG/JLG upto 31 March 2016. The Bank has extended loans of Rs 655.39 crore to 103,687 Women JLGs.

DBT is implemented in 113 districts. The disbursements under the scheme upto 31 March 2016 by Union Bank have stood at Rs 1,547.82 lakh.

Benefits

• Added 58 lakh accounts.
• Mobilised low cost deposit of Rs 858.07 crore in these accounts.
• Receiving various Government to customer benefits through PMJDY accounts.
• Deployed 5,407 Bank Mitrs in the field. Bank is in the process to engaging another 2500 non-SSA Bank Mitrs for success of this financial inclusion programme.
• PM MUDRA Yojana has opened doors to various new and existing entrepreneurs to avail credit.
• Bank is getting insurance business under Social Security Schemes and receiving commission as non-interest income.
• Focus has shifted to household coverage from village coverage; women empowerment; DBTs; and, integrated approach to delivery of banking, insurance and pension services.
• This is a major step in shifting people from poverty to prosperity.