i nc lu s i ve f i nanc e i nd i a re port 2014
32
2.4.1 Uttar Bihar Gramin Bank—Towards Viable
Development in Financially Excluded Areas
12
Uttar Bihar Gramin Bank (UBGB) is operational in 18
districts of Bihar. UBGB is headquartered at Muzaffarpur,
is an amalgam of eight erstwhile RRBs sponsored by
Central Bank of India. All districts of theUBGB command
area are classified as financially excluded districts by
Dr Rangarajan Committee (2008) and as backward
districts by the Planning Commission for Rashtriya Sam
Vikas Yojana. With 1,020 branches as on 31 March
2014, the bank represents about 40 per cent of the entire
branch network of commercial banks in these districts. It
is thus one of the largest RRBs in the country. The bank is
charting a course to lead holistic development of villages
of North Bihar by being proactive in all development
initiatives by involving government, NGOs, private
entities and individuals.
Concept of Gram Chetna—Centre of
Rural Viability
13
UBGB has introduced Gram Chetna, a perspective plan
for holistic development and wealth creation in villages
where each banking outlet of UBGB would act as the
focal point of extension, counselling, liaison, providing
forward and backward linkages and channelling financial
muscle required for rural development, while ensuring
profitability of each business unit. 8,019 unbanked villages
have been allotted to UBGB for financial inclusion.
These include 477 villages with population above 5,000,
and 2,140 villages with population ranging from 2,000
to 5,000. Each of these 2,617 centres can sustain a viable
USB doing resource mobilization and lending. Under
the perspective plan for the next five years, taking into
account the above-mentioned contributing factors, total
business is projected to grow from Rs. 12,547 crore in
2011–12 to Rs. 44,365 crore in 2017–18.
Technology-enabled, outsourced financial inclusion
model is to be leveraged to multiply the points of
presence to 3,500 and to garner banking business from
the hitherto unbanked population. The BC model would
serve to establish 2,500 USBs christened as ‘Sunahara
Sapna’
14
. A policy would be formulated for engaging
business facilitators as marketing agents and catalysts for
SHGs and JLGs and BCs for extending banking outreach
to new territories in a cost-effective way. A conscious
effort would be made to remove cultural blocks towards
lending and financial inclusion.
BC Channel and Financial Inclusion
Currently, 2,476 BCAs are working in the village area.
UBGB’s working area in four districts, i.e., Sheohar,
Sitamarhi, East Champaran, West Champaran, is flood-
prone and Naxalism-affected. While UBGB does not face
problem of Naxalism and the BCAs’ operations are not
being hampered by their activity, the flood situation has
often to be dealt with by them. The commitment of the
BCAs is such that they are available in the village even in
times of flood by sitting on top of stands of bamboo for
uninterrupted provision of services (see Table 2.2).
T
ABLE
2.2
UBGB-Status of Business Correspondent
Operations (as on 12 August 2014)
Particulars
Nos.
No. of BCs engaged
1
No. of BCA agents
2,476
No. of no-frills accounts
9,00,000
Operational
6,75,000
% of account operational
75
Amount in accounts
Rs. 6 crore
Source
: Krishna (2014).
The UBGB provides a fixed salary of Rs. 3,500 per
month to the BCA and they are able to make more than
500 customers through their operations. With this salary,
BCAs are motivated to stay with the family and work in
the village. This lowers the attrition rate of the BCAs. The
bank plans to involve BCAs as business facilitators on
commission of 1 per cent on recoveries for the bank. This
will enable them to enable them to earn higher commis-
sions and income.
UBGB has also initiated credit support to share crop-
pers. The bank provides Rs. 25,000 for the first time. The
bank has designated it as
Micro KCC
. After the credit is
repaid, the bank increases the limit to Rs. 100,000 for
the second dose. For artisans too, provision of Rs. 10,000
under the GCC has been initiated.
