FI&MM vertical:
- Under this new category, the bank will mainly finance agriculture and allied activities and Micro, Small and Medium Enterprises (MSMEs).
Over 8000 branches in rural and semi-urban areas have been identified for this purpose.
- Emphasis has been placed on improving the rural, semi urban, urban and metro areas with over 63,000 customer service points.
Benefits: This initiative by SBI will pave the way to cater the credit flow in to the micro-finance sector as it is hardly hit by the coronavirus (COVID-19) pandemic & it will lead to better utilisation of banking correspondent (BC) model.
Credit delivery on the first day: Under the vertical, the bank has disbursed about Rs 7.17 crore to 168 eligible MSME units under the Guaranteed Emergency Credit Line (GECL), part of the Atmanirbhar Bharat Abhiyan package.
Points to be noted:
- As we know that RBI (Reserve Bank of India) has been promoting financial inclusion under the two pronged system namely- Horizontally Differentiated Banking System (HDBS) and Vertically Differentiated Banking System (VDBS) as per the recommendations of the committee on ‘Comprehensive Financial Services for Small Businesses and Low-Income Households’ headed by Shri Nachiket Mor.
- In a HDBS design, the basic design element remains a full-service bank that combines all 3 building blocks of banking system (payments, deposits, and credit) but is differentiated primarily on the dimension of size or geography or sectoral focus. In a VDBS design, the full-service bank is replaced by banks that specialise in one or more of the building blocks of payments, deposits, and credit.
About State Bank of India (SBI):
Formation– 1 July 1955
Headquarters– Mumbai, Maharashtra
Chairman– Rajnish Kumar
Tagline– The banker to every Indian; With you- all the way; A bank of the common man; Pure banking, nothing else.