At present, nearly seventy percent of people in India live in villages. High level of rural indebtedness is identified as the root cause of rural poverty. Village money lender was the focal point on which rural credit system mostly depended. The majority of people living in rural area remain excluded from the purview of the financial institutions, even after 58 years of independence.

Credit is a critical input for the development of rural economy. Many of the farmers and rural house holds do not have access to institutional credit, thereby depriving them an opportunity to take up economic activities. Reaching out to the hither-to unreached segment of population and providing basic financial services, is the need of the hour. Accordingly, the RBI in consultation with GOI, have brought in the concept of financial inclusion.

"Financial Inclusion is the delivery of financial services to all the people in a fair, transparent and equitable manner at affordable cost. Financial Inclusion has the potential to improve the standards of life of the poor and the disadvantaged. Financial services permit individuals and households to manage the risk and uncertainties to save on better terms, to invest in a business venture or property or to cope with unforeseen expenses."

The contribution of poor and disadvantaged people to the economic development of the country is largely dependent upon their ability to access credit and create wealth. To improve the economic conditions of the poor people, banking and financial services are to be made available easily without any discrimination, for the public good. The formal and informal credit institutions in our country could reach only 49% of the population, whereas 51% of the population has remained outside the purview of basic banking services. This is despite the increase in number of branches of Commercial Banks and Regional Rural Banks (RRBs) from 8321 in the year 1969 to 68,282 branches as at the end of March 2005 and the decrease in population per branch office from 64,000 to 16,000 during the same period. It is estimated that Scheduled Commercial Banks have covered only 18.4 percent of the rural population through savings/deposit accounts and at a lower percentage of 17.2 percent of the rural households by way of loan accounts. This proves a point that the coverage of financial services in India is quite low compared to the developed countries.

	“Small man” has been the center, around which the Syndicate Bank’s activities revolved since inception. Social lending was the bank’s forte even before nationalization of banks.
	Pigmy Deposit Scheme introduced by the bank in 1928 was the earliest micro finance product meant for the persons of small means.
	The bank was the first to enter into agricultural finance and rural development in 1964.
	In tune with the Govt. objectives, the bank has introduced no-frills “SyndSamanya Savings Bank Account” for the common man and “Syndicate General Credit Card” (SGCC) for meeting credit needs of persons of small means.
	The bank has brought out a detailed operational manual for systematic implementation of financial inclusion programme for the use of all our branches, Lead Banks and other implementing agencies.
	During 2006-07, the Bank has identified 2246 villages through 1123 rural and semi-urban branches @ 2 villages/Branch to extend all types of banking services under Financial Inclusion.
	In these villages, household surveys are taken up for providing the required services like savings, credit, insurance and other financial services. No-frill Accounts are opened @ at least 1 adult member in each family to begin with, who are presently not having SB account with any bank.
	‘House hold business models’ are developed for each family based on household survey data. Sum total of the household survey will be the ‘village business model’, based on which the village development plan will be finalised.
	Under the above programme, 7.30 lac No-frill Accounts Accounts were opened, out of 9.65 lac identified households till 31.03.2007. Further, 2052 villages out of 2246 villages were declared fully compliant under Financial Inclusion.
	Bank has so far issued 3076 General Credit Cards (GCCs) with bank credit of Rs. 5.20 crore till 30.06.2007.
	Out of 25 Lead Districts managed by the Bank as a whole, Bagalkot, Bijapur, Bellary, Belgaum, Dakshina Kannada, Uttara Kannada & Udupi in Karnataka, Kasargod & Kannur in Kerala, Mewat in Haryana, Baghpat in Uttara Pradesh are already declared as 100% financially included districts.
	During 2007-08, bank has identified 2 more villages per rural and semi-urban branches in each region under Financial Inclusion, thus bringing 2256 additional villages under the programme in respect of 1128 rural & semi-urban branches.
	During 2007-08, Bank has decided to take up 100% financial inclusion in the remaining 15 Lead Districts of our Bank.
	It is planned to implement the financial inclusion programme in 3 phases:

Under Phase-I :- No-frill accounts are opened and the data on all the eligible families in our operational area are collected.

o Under Phase-II:-Village-wise Business models for individual families will be prepared and data base will be created.(Software is under trial run)

o Under Phase-III:- Based on family/ village business models, suitable area specific schemes will be prepared and implemented.

	SyndSamanya Savings Bank(SSSB)Account: Introduced no-frill Savings Bank Account for covering all the eligible and willing persons with simplified KYC norms. SB A/cs are opened with zero balance. So far, over 2.5 million SSSB accounts were opened.
	Syndicate General Credit Card (SGCC): Introduced “Syndicate General Credit Card” (SGCC) to provide hassle free credit to persons of small means of rural and semi-urban areas. An overdraft or cash credit facility is extended for meeting general credit needs of customers of small means without insisting on purpose, security or end- use. The credit limit shall not exceed Rs.25000/-. So far, 3076 Cards are issued with bank credit to the tune of Rs. 5.20 crore.
	Synd Swarojgar Credit Card (SSCC) Scheme: Introduced SSCC scheme for the benefit of small entrepreneurs such as artisans, handloom weavers, handicraftsman, self-employed persons, small business/service providers etc. with a maximum limit of Rs.50,000/- per borrower. As at June, 2007, the outstanding position was at Rs. 8.26 crore covering 1844 accounts.
	Syndicate Kisan Credit Card Scheme: Introduced Syndicate Kisan Credit Card Scheme to provide hassle free credit to farmers. 67659 lac new cards with credit outlay of Rs.298 crore were issued during the first quarter of 2007-08. Cumulative cards issued so far touched a new high of 8.73 lac with credit limit of Rs. 2893 crore.
	SyndJaiKisan Scheme: To simplify the system of credit delivery to the farmers, taking into account the requirement covering various investment expenditure on agriculture, contingencies, social obligations, repayment of high cost debts from money lenders and consumption needs, Bank has introduced a mortgage backed medium term hassle free loan scheme called SyndJaiKisan, by adopting a holistic approach. The scheme provides for sanctioning loan to the extent of 50% of the value of the property or 5 times the annual income of the farmer whichever is less, subject to a maximum of Rs.15.00 lac with a provision of overdraft facility upto 25% of the limit. This will be in addition to the crop production and other eligible credit provided to the farmers under normal schemes. Hassle free farmer friendly product covered 38866 farmers with credit out lay of Rs. 882 crore till 30th June 2007.The rate of interest is PLR-2.5% for loans upto Rs.50,000/-, PLR-2.0% for loans above Rs.50,000 and upto Rs.2.00 lakh and PLR for loans above Rs.2.00 lakh.
	SHG - Bank Linkage: Bank has been playing a pro-active role in formation of SHGs and their credit linkage by providing direct credit assistance and through NGO facilitation for consumption needs/income generating activities. During the first quarter of 2007-08, 4127 groups were credit linked with bank credit of Rs.41.11 crore. Cumulatively, as at June 2007, 91543 SHGs were credit linked with a credit exposure of Rs.537.11 crore. It indicates an average lending of Rs.58,673/- per group. out Out of which, 73,727 women groups were credit linked with a credit limit of Rs.411.69 crore.The outstanding credit under this segment is Rs.325.21 crore against 49,982 accounts as on 30.06.2007.
	Scheme for financing tenant farmers, share croppers or oral lessees: Bank has introduced two schemes for tenant farmers, i) through Joint Liability Group (JLG) approach and ii) through individual approach – to meet their credit needs for crop production requirements and expenses contingent to cultivation of crops and credit needs for allied activities on easy terms and conditions. Bank has an outstanding credit of Rs. 4.23 crore for 471 JLGs as on 30.06.2007.
	Weaker Section Advances: Bank has taken several initiatives to meet the credit requirements of Women and other Weaker Section categories. The share of weaker section advances was at Rs 4693 crore surpassing the stipulated target of 10% of Net Bank Credit and the share of credit to women was at over Rs 2841 crore surpassing the stipulated target of 6% of Net Bank Credit.
	SyndSmallCredit: As a step towards implementation of 2ndphase of financial inclusion, a new product was launched on 21.06.2007 for providing doorstep banking facility to entrepreneurs of small means contributing to new Pigmy Deposit “Pigmy plus 2007”. A person can avail credit limit upto Rs. 1.50 lakh towards setting up of an economic enterprise, consumption, contingencies and also partly towards repayment of high cost private debts. The loan installments are fixed based on ballooning repayment and collected through contributions to Pigmy plus 2007 deposit account. 1% incentive is offered for prompt repayment. Bank proposes to disburse an amount of Rs. 120 crore during 2007-08. As against this, disbursed Rs. 1.50 crore covering 178 borrowal accounts up to August 2007.
	Training Rural Entre preneurs: Empowering Rural Entrepreneurs is an important step in achieving the objective of supporting self employment ventures in rural areas. Towards this end, Syndicate Bank in association with Sri Dharmasthala Manjunatheshwara Educational Trust & Canara Bank established Rural Development and Self Employment Training Institute (RUDSET Institute) to provide training to rural unemployed youth in various sustainable activities. There are 20 RUDSET Institutes in various parts of the country. They have so far trained over 1,89,495 candidates with settlement rate of about 68%.
	It is planned to implement the financial inclusion programme in 3 phases:

Syndicate Bank in commemoration of the Platinum Jubilee, established Syndicate Rural Development Trust (SRDT) during the year 2000, with the aim of encouraging rural development through various initiatives. The trust has established 8 Syndicate Institutes of Rural Entrepreneurship Development (SIRDs) for providing Entrepreneurship Development Training to rural unemployed and promoting micro credit activities, especially among weaker sections and women. SIRDs have so far trained nearly 39,308 rural entrepreneurs and attained settlement rate of over 63%.

	A software is developed for preparation of family/ village business models for use of our branches/ Lead Districts based on the household survey data collected under Financial Inclusion.
	Bank proposes to install a few ATMs at Rural locations during the current fiscal, with bio- metric capabilities, which will operate on the basis of finger prints or other bio-metric methods, instead of PIN used generally, to facilitate rural customers.
	In order to minimise the transaction costs under financial inclusion, over 1500 branches and over 90% of the business of the bank are brought under Core Banking. The SyndSamanya Account holders at these branches are issued ATM/Debit Cards which they can use all over the country at over 700 ATMs of the bank free of cost to withdraw cash. They also have access to over 3000 ATMs of the cash tree network of shared ATMs with other banks. There are no restrictions on the number of withdrawals through ATMs.
	As a part of low cost remittance solutions to the no-frill account holders, a provision has been made to collect local and outstation cheques up to Rs. 50000/- per year free of charge.
	To begin with, as per directive of RBI, our Bank is setting up "Financial Literacy-cum- Counseling Center at Bijapur ( Lead District of our Bank ) and at Belgaum by Karnataka Vikas Grameena Bank ( RRB sponsored by our Bank ). Such centers will be set up in all our Lead Districts in due course.

The bank established the country’s first Regional Rural Bank viz. Prathama Bank in the year 1975. At present there are five Regional Rural Banks (after amalgamation) sponsored by SyndicateBank which are profit making and act as model among the Regional Rural Banks in the country. The RRBs are operating in 5 States covering 30 districts with a net work of 1203 branches and with a total business of Rs. 16133 crore. In all, the 5 RRBs together have 102.68 lac clients. The RRBs have issued 7.80 lakh KCCs covering an amount of Rs. 2601.71 crore. Further, RRBs have taken the lead in SHG- Bank credit linkage by financing over 76765 SHGs with a loan component of Rs. 392.11 crore benefiting about 9.71 lac families. Further, the RRBs have opened 10.24 lac No Frills Savings Bank Accounts and issued 12232 General Credit Cards with a limit of Rs. 26.40 crore.

SyndicateBank is known as “Small Man’s Big Bank” and initiated various measures for financial inclusion right from the inception. Be it the introduction of Pigmy Deposit Scheme or financing agriculture sector or establishing training institute for rural unemployed, SyndicateBank is always the front runner in implementing innovative banking schemes meant for the economic development of the people belonging to weaker sections, farmers, rural artisans etc. In the context of the present need to provide banking facilities to a vast majority of the population, SyndicateBank will continue to implement various programmes in reaching the unreached to achieve the objective of greater financial inclusion.