C.PARAMASIVAN - OPERATIONAL EFFICIENCY OF FINANCIAL INCLUSION IN PUDUCHERRYCp and vg selp articlec

SELP Journal of Social Science July -September 2013

Vol . IV : Issue. 17 ISSN:0975-9999

84

OPERATIONAL EFFICIENCY OF FINANCIAL INCLUSION IN PUDUCHERRYV. Ganeshkumar,

Ph. D Full Time Research ScholarsDr. C. Paramasivan,

Assistant Professor & Research SupervisorPG & Research Department of Commerce, Periyar E. V. R. College, Trichy – 23, Tamil Nadu

ABSTRACTEvery man needs certain amount of money to meet their requirements and in some cases; men

need money to meet his basic needs life food, shelter, cloth etc. This is the basic concept of thehuman begins to earn up to the maximum level and save up to sufficient level. In this regardsbanking industries performed well and concentrated in all the walk of human beings. In India,banking sector have an old age concept and involve long evolutionally history since 1850’s. Nowit has diversified into commercial banks, development banks, investment banks etc. Commercialbanks are well known institutions which are closely associated with the socio-economicdevelopment of the nation. In this regard, Financial Inclusion play a key role in the field of ruraldevelopment and how it can be implemented effectively through Indian Bank in the selected districtis study in this research. This study focus on operational efficiency of financial inclusion inPuducherry

Key words: Inclusive growth, Financial inclusion, Borrowers, Banking services.

IntroductionFinancial inclusion is an innovative

concept which makes alternative techniquesto promote the banking habits of the ruralpeople because, India is considered as largestrural people consist in the world. Financialinclusion is aimed at providing banking andfinancial services to all people in a fair,transparent and equitable manner a taffordable cost. Households with low incomeoften lack access to bank account and haveto spend time and money for multiple visitsto avail the banking services, be it opening asavings bank account or availing a loan. These

families find it more difficult to save and toplan financially for the future. Thus, theunbaked public is largely cut off from theBanking products/services. It is the endeavorof the Bank to provide the basic bankingfacility of SB a/c’s to all the unbanked.

Statement of the ProblemSocial & Economic position, low-income

people normally do not feel the need to bankas the transaction carried out by them ismostly in cash that too with low amount.Secondly, many times people do not want todisclose the information which would berequired for accessing any financial service.

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ISSN : 0975-9999Vol IV : Issue. 17

July - Septemper 2013



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Thirdly, poor people, mostly, do not have anyidentification/introduction, which is acceptedby banks to open an account (or) access otherfinancial services. Fourthly, lack ofunderstanding of financial services and theoperations to be carr ied out is a lso ahindrance. Fifthly, poor people do not havemuch absorptive capacity for all the financialservices. Need for different financial services.Finally, the spread of customers is very thinwhich makes the operation of reaching out tothem a costly affair.

Objectives1. To identity the financial inclusion on

purpose of opening account in Puducherry

Hypotheses1. There is no significant relationship among

the respondents of differ ent socioeconomic profile to level of interest inlocal financial services.

2. There is no significant relationship amongthe respondents belongs to different socio-economic profile to under bankingservices.

MethodologyThis study is an empirical one. The data

and other information required for the studywere collected from both pr imary andsecondary sources. Pr imary data werecollected from the no frill account holdersdirectly, using a structured interview scheduleand the secondary data were collected fromvarious sources of books, journal, articles,magazines and related web sites informationfrom retailers Other information pertinent tothe study has been collected by means ofinterviews and discussions with theGovernment officia ls and Indian BankJournals Office.

Sampling DesignThere are 23 Public Sector Banks, 13

Private Sector Banks, 1 Co-operative Banks,and 1 Regional Rural Banks in operation inPuducherry as on March 2012. In order tocollect primary data for the purpose of thestudy, multi-stage sampling technique isadapted. At the first stage, 7 banks whichoutnumber in number of branches wereselected out of the 38 banks. In the secondstage, 5 per cent of the branches i.e 125branches were selected out of the 7 selectedbanks. In the final stages, from each of thebranch 80 no frill accounts holders wereselected on the purposive basis. Therefore,the sample size consists of 500 respondents,of the following table shows the samplingdistribution of the present study.

Period of studyThe primary data required for the study

was collected dur ing the month ofDecember-2012 from no frill account holdersin the Puducherry.

Table 1: Gender Vs of Household AccountsHo: there is no relationship between

gender and household accounts of therespondents and financial services related

Source: Primary Data. (2012).

Household Account between Genders

The calculated chi square value is (71.616)greater than the table value (11.341) at 1 per



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cent level of significance, the test issignification; Therefore, there is significantrelationship between different householdaccounts which gender used in Puducherry.Therefore, the null hypothesis is (Ho1)rejected. There, the male respondents arehighly in number of house holders inPuducherry.

Table 2: Age Vs of Household AccountHo: There is no relationship between age

and household account of the respondents andfinancial service related


Household Account between Ages

The calculated chi square value is(161.441) greater than the table value(21.666) at 1 per cent level of significance,therefore, there is significance relationshipbetween different household account with ageused in Puducherry. Therefore, the nullhypothesis is (Ho1) rejected. Therefore, the41 above respondents are highly in numberof house holders in Puducherry.Table 3: Marital Status Vs of HouseholdAccounts

Ho: there is no relationship between maritalstatus and household accounts of the respondentsand financial services related factors.


Household Accounts between MaritalStatuses

The calculated chi square value is (33.859)greater than the table value (21. 666) at 1per cent level of significance, Further, thereis significant relationship between differentmarital status with household accounts usedin Puducherry. Therefore, the null hypothesisis (Ho1) rejected. Therefore, the marriedrespondents are highly in number of householders in Puducherry.

Table 4: Occupation Vs of HouseholdAccounts

Ho: there is no relationship betweenoccupation and household accounts of therespondents with related factors.




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Household Account between Occupations

The calculated chi square value is (99.942)greater than the table value (21.666) at 1 percent level of significance, Therefore, there issignificance relationship between differentoccupation with household accounts used inPuducherry. Therefore, the null hypothesis is(Ho1) rejected. Therefore, the occupationrespondents are highly in number of householders in Puducherry.

Table 5: Qualification Vs of HouseholdAccounts

Ho: There is no relationship betweenqualification and household accounts of therespondents and financial service relatedfactors.


Household Accounts betweenQualifications

The calculated chi square value is (139.21)greater than the table value (30.578) at 1percent level of significance, Therefore, there issignificant relationship between different

qualification with household accounts usedin Puducherry. Therefore, the null hypothesisis (Ho1) rejected. Therefore, the educationrespondents are highly in number of householders in Puducherry.Findings1. A significant relationship is found among

the no of account your household of therespondents of gender, age, marital status,education, occupation, in financial servicein Puducherry therefore, the nullhypothesis is (H01) rejected.

2. A significant relationship is calculatedamong the no of accounts your householdof the respondents of annual income, infinancial service in Puducherry therefore,the null hypothesis is (H02) accepted.

Suggestions1. Banks will have to take steps to reduce

the legal procedure and insistence ofcollateral while lending to increase thenumber of customers.

2. Building customer awareness andinforming the public on use of M-bankingmodes is required.

3. Bank should enhance their refundfacilities concerns to if wrong transactionsmade by customers by mistake or if any.

4. The banks may adopt a policy of assessingthe genuine requirements of sociallyexcluded group and cover all the needs ofsmall and petty borrowers instead ofproviding a single loan only.

5. Banks should leverage technology to themaximum to introduce the new accountholders to use and transact the accountsmore and save more.



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ConclusionPuducherry is successful financial

inclusion, the banks need to pay attention onthe following: The rural branches of the banksmay be equipped with motivated and trainedstaff having some marketing skill andknowledge on appraisal of small loan Afteropening ‘no frills’ account, proper measuresmay be made to organise them into groups forinculcating the habit of thrift which willult imately enable them to avail creditfacilities. Utilise the services of MFI, NGOs,SHGs, Business Facilita tors andCorrespondents, etc. to extend the financialinclusion with reasonable cost.

Reference1. Amol Agrawal. (2008). “The need for

Financial Inclusion with an Indianperspective”, Industrial DevelopmentBank of India, pp -1-10.

2. Goodwin. D Adelman. L Middleton. S andAshworth. K. (2000). “Debt, MoneyManagement and Access to FinancialServices: Evidence from the 1999 PSESurvey of Britain”, Entre for Research insocial policy, Lough borough University.

3. La Francophonie. (2011). “The G20 andFinancial Inclusion”, CommonwealthSecretariat, pp 1-30.

4. Mihasonirina Andrianaivo and KangniKpodar. (2011). “ICT, Financial Inclusion,and Growth: Evidence from Afr icanCountries”, International Monetary Fund,pp 1-46.

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C.PARAMASIVAN - OPERATIONAL EFFICIENCY OF FINANCIAL INCLUSION IN PUDUCHERRYCp and vg selp articlec