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The expansion of India's telecom industry has led to an "all-inclusive growth" of the Indian economy in terms of GDP In the 2006/07 the country saw the growth rate hit 9.6 percent-Majorly due to telecom sector. The demand for telecommunication services are surging across rural India, as middle class and upper classes are growing in most villages
OPPORTUNITY IN RURAL INDIA
A huge population ² 720 million people lives in 630,000 villages A massive economy ² over 50% of India·s total GDP. There are almost same number of middle to high income households in rural areas as urban India A parallel economy ² with the same needs as developed markets but a reduced ability to pay.
GAP BETWEEN URBAN AND RURAL
No celebrities will work No mass media coverage -Due to lack of access to technology Rural market lies in the bottom of the Pyramid. The 4 A·s work for them Availability Affordability Acceptability Awareness Product Categories
Sim selling Paper voucher recharging E- recharging P.C.O. connections
y y Lack of healthcare services -Telecom and broadband intervention will allow doctors. nurses and midwives to stay in closer contact with patients. y . payments and delivery requests can all help isolated small-scale entrepreneurs in remote locations. Ignorance of governance policies -Rural governance services giving access to citizen data will allow the rural population to be more informed about national level developments and reduce the urban-rural divide.COMMUNICATION HELPS y Lack of transportation -Coordinated rural transportation based on mobile information delivery. Difficulties in managing commercial transactions -Micro-commerce ventures like mobile ordering. will increase convenience and allow users to find reliable. regular and affordable transportation ¶on-demand·.
.not extensive The amount that people spend is Rs 10/.IDEA Has good network in the village Availability is high but the distribution is not well channelized Branding is seen in and around the village.to as max. they can.
AIRTEL Is favored in one village and not in the rest The network is good in villages because of the existence of a tower Availability is high. but distribution is poor Very poor branding around the villages The spending of the people remain the same irrespective of the network .
VODAFONE Not favored by the villagers Usage rate of Vodafone is extremely low because of poor network Availability is not as high as that of Idea and Airtel. This is because of low demand Huge amount of branding is done all around the villages and district .
DISTRIBUTION Well channelized distribution Direct distribution to the rural market Trade discount and trade promotions Incentives to the shopkeepers for branding and meeting sales target prizes Tie-up with a mobile company for low cost phones to be distributed - - - .
g.PROMOTIONS y - y y y Women·s initiative Educate them in the village to encourage sales Special schemes . e. speak to the ancestral home free of cost Interaction with women on Mondays Festival branding The service provider can brand the pandals Built kiosks Cultural fairs. dramas and respected community elders Fairs and weddings .
PROMOTIONAL STRATEGIES - - - Communicating and changing quality perception Value for money Communication in Indian language Exploit social and cultural values Sensitive people Talking about a normal Indian Base advertisements and interactions on normal Indian families Marathi names for the schemes .
C.This will help the villagers to connect with the brand .The target audience is the youth Medical check ups twice in a year .CSR ACTIVITIES Product Categories Sim selling Paper voucher recharging E.O.recharging P. connections Workshops to educate the children in the villages The best performer gets a mobile phone with sim card Sponsor cricket tournaments .
INSURANCE SECTOR IN RURAL AREAS .
Why INSURANCE is needed? As responsible family members who have a commitment to provide for near and dear ones even if we are no more.India has been known as the ´land of villagesµ inspite of growing rate of urbanisation and migration. Life insurance is a product one must think about and take action .
The bottom of pyramid ² are poor people who live on an income of less than Rs 50 a day. . made a provision that acquistion of certain amount of rural as well as urban area is mandatory by every company. No companies has tapped this market to the fullest. IRDA established a act of parliament in 1999. Rural insurance offers a ready opportunity for growth and increased volumes.
IRDA norms on Rural Insurance IRDA implemented compulsory targets for making insurance coverages to rural and social deprived sections of the society. fishermen etc. the regulation has required mandatory insurance coverage for population falling under ´social sectorsµ. In addition to the coverage to the rural population . Social sectors are agricultural labours .road construction workers. .
.Rural insurance needs Preference of rural household. LIC assured in rural areas is below rs 100000.land and daughter·s marriage.viewed as a means to save money to meet long term goals. People prefered endowment products with a policy terms of 25 yrs and above Irda has requested companies to design innovative products for rural market. View LI as reliable and essential form of saving. Ex.
to pay premium payments on regualr basis without interuptions.lack of proper documentation at the time of issuing policy.Issues Ability of rural policy holders. Issues with collection and remittance of premuims accurately Verifying the claims in rural areas are time consuming and expensive. Operational issues. .
regular premium payment.Efforts of private playersMost cos have started their business in metros TATA AIG. TATA AIG insurance company has accounted for 11% growth of life polices in march 2002.low cost term plans AYUSHAMAN yojana-single premium at a single term.have come up micro insurance schemes for rural market Navkalyan yogna. .
. Tailor made insurance products.cooperative banks and RRb·s has ready access to rural population and their homogeneous nature make them ideal for sale` .low cost term insurance produts tailored for rural sector.Strategies . Creation of new distribution linksLic has agents in rural areas Whereas privated cos has preferred bancassurance such as RRB Tie ups..
Conclusion The rising of rural purchase power.BANKS and atlast both public and private sector banks would help to safeguard and prevent poor from uncertainity in future.and rural infrastructure is the key drivers which would help to capture the untapped and potential market.opening up economy.key drivers would lie on NGO·s. Thus govt policies facilitate the process.govt drives.SHG·S. .
BANKING SECTORS IN RURAL AREAS Rural banking in India started since the establishment of banking sector in India. . Today. Rural Banks in those days mainly focused upon the agro sector. commercial banks and Regional rural banks in India are penetrating every corner of the country are extending a helping hand in the growth process of the rural sector in the country.
35% and 15% respectively.9. . sponsor bank and the State Government in the proportion of 50%. The issued capital of RRBs is shared by Central Government.1975 and thereafter Section 3(1) of the RRB Act.Structure of regional rural bank The establishment of the Regional Rural Banks (RRBs) was initiated in 1975 under the provisions of the ordinance promulgated on 26. 1976.
RRBs established with the explicit objective of: * Bridging the credit gap in rural areas * Check the outflow of rural deposits to urban areas * Reduce regional imbalances and increase rural employment generation .
it is mandatory that any shortfall in fulfilling the 40 percent target or the 18 percent sub-target would have to go to the corpus Rural Infrastructure Development Fund(RIDF). Besides. .ROLE OF RBI IN RURAL CREDIT Since it was set up in 1934. RBI has been taking a series of steps for providing timely and adequate credit through NABARD. RBI has been taking keen interest in expanding credit to the rural sector. out of which at least 18 percent of net bank credit should flow to agriculture. Scheduled commercial banks excluding foreign banks have been forced to supplement NABARDs efforts-through the stipulation that 40percent of net bank credit should go to the priority sector. After NABARD was set up as the apex bank for agriculture and rural development.RBI has also taken steps in recent years to strengthen institutional mechanisms such as recapitalisation of Regional Rural Banks (RRBs) and setting up of local area banks(LABs).
Non-Governmental organizations(NGOs).Credit Unions etc. .The major thrust of these micro-finance initiatives is through the setting up of Self Help Groups (SHGs).IMPOTANT SERVICES OF RRB Micro-Finance Micro-finance is a novel approach to "banking with poor"as they attempt to combine lower transaction costs and high degree of repayments.
The purpose of the Kisan Credit Cards(KCC) scheme is to facilities short term credit to farmers.Kisan(Farmers') Credit Card Another notable development in recent years is the introduction of Kisan Credit Cards(KCC) in 199899. . 187 RRBs and 334 Central cooperative banks.The scheme has gained popularity and its implementation has been taken up by 27 commercial banks.
. Among commercial crops. cotton. . oilseeds and pulses. flood.It is necessary to protect the farmers from natural calamities and ensure their credit eligibility from the next season.Agricultural Insurance As Agricultural is highly susceptible to risks such as drought. onion. sugarcane potato. seven crops viz. the Government of India introduced a comprehensive crop insurance scheme thought the country in 1985 covering major cereal crops. pests etc. ginger. turmeric and chilies are presently covered. Towards this purpose.
1965. . Haryana State Cooperative Apex Bank Limited NABARD Sindhanur Urban Souharda Co-operative Bank United Bank of India Syndicate Bank Co-operative bank CO-OPERATIVE BANKS AND RURAL CREDIT by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act.BANKS: FUNCTIONING FOR THE DEVELOPMENT OF RURAL AREAS The rural banks of SBI are spread in 13 states extending from Kashmir to Karnataka and Himachal Pradesh to North East.
Co-operative banks in India finance rural areas under: Farming Cattle Milk Hatchery Personal finance Institutional Arrangements for Rural Credit (Cooperatives) .
DIFFERENT BANKS UNDER RRB Central Co-operative Banks (CCBs) The central co-operative banks are located at the district headquarters or some prominent town of the district. These banks have a few private individuals also who provide both finance and management. Their own share capital and reserves Deposits from the public and Loans from the state co-operative banks Their main function is to lend to primary credit society apart from that. The central co-operative banks have three sources of funds. There are now 367 central co-operative banks. such as attracting deposits from the general public and lending to the needy against proper securities. . central coopertive banks have been undertaking normal commercial banking business also.
They serve as the link between the Reserve bank and the general money market on the one side and the central cooperative and primary societies on the other. loans and advances from the Reserve Bank and they are own share capital and reserves. they finance.State Co-operative Banks (SCBs) The state Co-operative Banks. co-ordinate and control the working of the central Co-operative Banks in each state. now 29 in number. They obtain their funds mainly from the general public by way of deposits. .
COMMERCIAL BANKS AND RURAL CREDIT The commercial banks at present provide short term crop loans account for nearly 45 to 47% of the total loans given and disbursed by the commercial banks. for construction of wells and tube well. for purchase of ploughs. poultry. etc. for dairying. bee keeping. for leveling and development of land. piggery. These loans come to 15 to 16%. animals. commercial banks also extend loans for allied activities viz.. Term loans for varying periods are given for purchasing pump sets. . for development of fruit and garden crops. tractors and other agricultural machinery. fisheries and others.
As regard small cultivators near urban areas and irrigation facilities. commercial banks can help them to go in for vegetable cultivation or combine it with small poultry farming and maintaing of one or two milch cattle. .Commercial Banks and Small Farmers The commercial banks identifying the small farmers through Small Farmers Development Agencies (SFDA) set up in various districts and group them into various categories for credit support so as to enable them to become bible cultivators.
The progress of RRBs in the initial stage was quite rapid. artisians and small entrepreneurs and develop agriculture. the government passed the Regional Rural Banks Act. trade. agricultural laborers. . commerce. There are now 196 RRBs in 23 states of the country with 14.REGIONAL RURAL BANKS AND RURAL CREDIT The Narasimham committee on rural credit recommended the establishment of Regional Rural Banks (RRBs) on the ground that they would be much better suited than the commercial banks or co-operative banks in meeting the needs of rural areas. industry and other productive activities in the rural areas. The main objective of RRBs is to provide credit and other facilities particularly to the small and marginal farmers. 1976. Accepting the recommendations of the Narasimham committee.The target was exceeded.200 branches. the Sixth Five-year plan(1980-85) had envisaged the setting up of 170 RRBs covering 270 districts by the end of march 1985. For instance.
panchayati raj institutions and the banks operating in rural areas. This. and most of all. they have taken a leading role in financing Self-Help Groups (SHGs) and other micro-credit institutions and linking such groups with the formal credit sector. something like a National Rural Bank of India (NRBI). in turn. there should be greater coordination between district planning authorities. they should be encouraged to develop more sophisticated methods of credit delivery to meet the changing needs of farming. Ideally. really requires an apex body that would cover and oversee all the RRBs. In recent years. And most certainly they should be kept apart from a profit-oriented corporate motivation that would reduce their capacity to provide much needed financial services to the rural areas. The number of rural branches should be increased rather than reduced. Only then will the RRBs fulfill the promise that is so essential for rural development .CONCLUSION RRBs should really be strengthened and provided with more resources with which they can undertake more of these important activities. RRBs' performance in respect of some important indicators was certainly better than that of commercial banks or even cooperatives. the best use of the resources raised by RRBs through deposits would be through extensive cross-subsidisation. RRBs have also performed better in terms of providing loans to small and retail traders and petty non-farm rural activities. including to agriculture.
.What is Bank A Bank is financial institution whose primary activity is to act as payment agent for customers. In India they are a major part of the financial sector and serve as life blood for the whole industry necessary to survive. and to borrow land. Now banking is a service industry.
Rural Banking Today Indian Economy is considered as one of the most rapidly expanded one among the developing countries of the world. Bank located in rural areas come up with diverse programmes to bring changes in the life of rural people by engaging them in self employment schemes. .
Reserve Bank of India.Evaluation of Rural banking in India. Kissan Credit Cards . Regional Rural Banks. Commercial Banks. Co-operative credit institutions. National Rural Banks. Nabard.
. Besides the government schemes and programmes the banking services came out with their own programmes in promoting the interest of rural entrepreneurship amongst these people.Banking Services & Rural Entrepreneurship The Banking Sector have transformed the farmers of yesterday to a top conscious entrepreneur today and also contributing his part in the development of national economy.
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