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Activity:
58 views;
last activity : 12 27 2010 08:46:10 +0000
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Deposit products for Farmers
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Vast Network of Rural Postal Savings Bank Can Take the Lead
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Deposits & Micro Credit
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You are absolutely right, but ---------
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THE PLIGHT OF FARMERS
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chit funds
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Adopt Sahara India Model of collecting deposit at Farmers'.door
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As of now, there are no deposit products with banks which are meant for farmers. Almost all the deposit schemes, run by the scheduled commercial banks are aimed at the salary and wage earners. This picture is ripe for change. Deposits from farmers now rank closely behind that of salary and wage earners. So, we need banks to introduce products which are farmer centric and this also helps in better financial inclusion altogether. |
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Introduce innovative schemes to suit the farmers so that the deposits grow by leaps and bounds.
Completely agree to Leena's view. Deposit products should be made suitable for farmers. Banks should start accepting micro-deposits. This will encourage small farmers to save for future & will increase the bank deposits. Banks can also look to cross sell MF SIPs but maybe they will have to lower the acceptable amount from Rs.500/- to as low as Rs.50/-
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RURAL POSTAL SAVINGS BANK IS THE ANSWER! Postal services network of India is the largest network of the world of which Postal Savings Bank is a very important part maintaining accounts of small savings of all the classes of public. At the time of Independence there were only 23,344 post offices throughout the country. Of these 19,184 post offices were in the rural areas and 4,160 in the urban areas. As on 31 March 2008 the post offices in rural areas have increased to the tune of 1,39,173 (more than 7 times), while the count of Post Offices in urban areas is only 15,862. As a result of this seven-fold growth in the postal network, today India has the largest postal network in the world. Members may like to read the full story about the Postal Network and System at: http://india.gov.in/sectors/communication/postal_network.php SO FAR AS RURAL POSTAL SAVINGS NETWORK IS CONCERNED, THE FIGURE IS QUITE ASTONISHING. According to a report, dated 16 Jul, 2009 of the Economic Times, some 31.2 million (31,200,000) postal savings accounts were opened in 2008-09 to facilitate wage disbursal under the National Rural Employment Guarantee Scheme (NREGS). The number is expected to cross the 50-million (50,000,000) mark by the end of 2009-10 when disbursals under the scheme will cross Rs 10,000 crore, said a senior official at India Post. You may like to read full story at: http://economictimes.indiatimes.com/personal-finance/savings-centre/savings-news/Small-savings-grace-for-India-Post/articleshow/4782304.cms SO, Rural Postal Savings Network, having a very wide network, can be the best source to provide better service to Farmers across the country. |
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I totally agree with you. Indian post offices are the largest network of retailers in the world.There is no institution similar to that of post offices. One of the most important fact is the accounts of post offices are reconciled in just three days. It is one of the most robust institutions in our country. I have done a small research and found that post offices provide 36 different services ~ it is a banker, insurer, center for communication, financial advisor etc.
Excellent idea. Commercial Banks can tie up with Postal Department and use their infrastructure . Now Post offices are doing many other services like accepting applications for Passport, etc. So this seems to be a fantastic idea. Also, this will also improve the finances of the Postal department which has an excess capcaity.The Postman knows the nook and corner of the villages and also is personally conversant with everyone.
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Thank you Leena for reference. Yes the banks have to come up with new deposit products for the farmers. If banks can extend micro credit to the farmers, something like need-based credit, it will further improve their position and will become a win-win situation to bankers and farmers. Banks in India, are you listening ?
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Banks should focus on farmer oriented deposit based products. A good option could be need based credit based on pre-defined criteria, which will be a win-win situation for both the banks and the farmers. However, the banks may not be able to focus on micro credit as the administrative overheads and other factors are quite cumbersome. Additionally, if the banks are able to do all that the MFIs (micro finance institutions) are expected to be doing, then the role of the MFI in the industrial scenario will become a moot point in the long term future. Thus, the banks may focus on need based credit based on predefined criteria and deposits focused primarily to meet the needs of the farmers... Thanks for the referral, Suryanarayan....
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The information that farmers's deposits match the level of salaried is heartening. All our initial five year plans completelely ignored this sector and concentrated on industrialisation driving poor farmers slowly to cities. Now SEZs also threaten their existence. Highterto rural credit was looked after by rural cooperative banks who did some good job. There was also NABARD which was meant to be a specialised agency for this sector. Probably, that is the reason why other Banks started ignoring this vital sector. There are also RBI guidelines , fixing the policies of credit ( This is available in RBI's website), yet as Leena states, unless something is done in a proactive manner, we will soon be dependent on food imports for our day-to-day needs. Leena's idea is a grand one.
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farmers need to be supported financially . no doubt about it. but i am a little surprised at the information that farmers deposit in banks is sbubstantial. this needs to be verified. and allownace need to be made for wrong classification of the depositor as farmers
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Thanks for the referral Ms.Leena Khade. In the present scenario, our Indian farmers are placed on dilemma since they are unable to do cultivation in a full swing for want irrigation facilities. The reasons are the monsoon failure that convert all the fertile lands into the dry lands which becomes unsuitable for agriculture. Besides, the increasing trend in transforming all the prime agriculture land into several satellite townships under SEZ for appartment purposes. In certain cases there are farmers who are unable to engage in cultivation due to their financial constraints, and some are unable to repay the money to the lenders. Under the circumstances how the farmers in India will be able to save money or make deposits in the bank from their earnings accruing from the sale proceeds of agriculture products. Of course this is not the case with a few Indian States. |
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Thanks Natteraja for referral. thanks Leena. I agree with your views Natteraja and that the reason the deposits shows higher since it is a matter of few states. When 6.5 lac villages and their farmmers are taken into account the picture will change dramatically.
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banks can think of running chits in rural areas. let groups open accounts and make regular ( say monthly ) remittances. members of the groups can authorise one of the members to take the amount as loan free of interest every month. banks can offer this as s free service to start with .
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We we all know the enormous growth of Sahara India as non banking financial sector. The success story lies behind spreading their reach to small savers far and wide through door to do collection of deposits daily or periodically. Various schemes in this line by banks executed aggressively may fill the whole banks are lacking to involve farmers in their fold and mop and deposits in volume. |
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