82nd International Atlantic Economic Conference

October 13 - 16, 2016 | Washington, USA

Implementing financial inclusion: The case of the State Bank of India

Friday, October 14, 2016: 2:15 PM
Narasimha Murthy Kalanatha Bhatta, M.B.A., Ph.D. , Information Systems, Indian Institute of Management, Indore, India
Keyur Thaker, Ph.D. , IIM Indore, Indore, India
Saumya Kanti Ghosh, Ph.D. , State Bank of India, Mumbai, India
Saket Hishikar, Ph.D. , State Bank of India, Mumbai, India
This paper discusses the nuances of implementing financial inclusion in India where the huge rural population is yet to come into the financial system and enjoy the benefits of various governmental schemes specially designed for them. The paper analyses challenges involved in implementing financial inclusion in a vast, diversified country like India, where financial literacy is extremely low and people fall into the clutches of land sharks, ultimately pushing them towards drastic steps like suicide etc.

The state run public sector bank, State Bank of India (SBI), one of the largest public sector banks across the globe, has worked out several strategies and leveraged advanced technologies for taking banking and financial system to every nook and corner of the country. They further supplemented their efforts through increasing financial literacy by setting up several financial literacy centres across the country. Their continued focus on development of innovative technologies enabled seamless merging of rural populace with their urban counterparts in availing banking services.

Field research and a series of in-depth interviews were carried out with top and working level leadership of the SBI on challenges faced by them in traversing this path to expand their rural footprint and how they collaborated with local NGOs and microfinancing institutions (MFI) to reach some of the most difficult geographic terrains like Arunachal Pradesh, Jammu & Kashmir, Andaman and Nicobar Islands.

The paper articulates key insights to understand the importance of financial inclusion in a developing economy and also identifies the complexities and factors influencing its successful implementation. The paper serves as a guideline for developing economies, in strategizing their own methodologies in implementing financial inclusion.