Social Banking in India

To achieve the goal of sustainable development of the country, the banking sector has to provide the basic financial support required by the economically weaker sections of the society. This will enable these sections to participate and benefit from the developmental initiatives of the government, and this system has been termed as social banking.


Need for Social Banking?
The network of cooperative banks, Regional Rural Banks (RRBs), commercial banks, primary agricultural credit societies and Self Help Groups (SHGs), plays a pivotal role in the upliftment of poverty. However, availability of credit alone cannot improve the poverty situation. Hence, reforms like social banking are implemented by banks, to curb poverty.

Some of the social banking services supported by banks such as Vijaya Bank are:

PMJDY: The Pradhan Mantri Jan Dhan Yojana is a national scheme to ensure financial services like savings and deposit accounts, credit, insurance and pension etc. are made available in an affordable manner to the weaker sections of society.

Pradhan Mantri Jeevan Jyoti Bima Yojana: Only 20% of the Indian population is reported to be insured, and the Pradhan Mantri Jeevan Jyoti Bima Yojana, is a government supported insurance scheme, which aims to increase the percentage of people opting for insurance. Under this scheme, people can get insurance coverage of up to ₹2 lakh in case of death due to any cause, and this scheme is available for people of age 18 - 50, holding a bank account.

Pradhan Mantri Suraksha Bima Yojana: This is an insurance scheme set up by the Indian government for coverage in case of accidental death. This scheme is available to people who are in the age bracket of 18 - 70 years and hold bank accounts. Under this scheme, people are entitled to get insurance coverage of up to ₹2 lakh in case of death or full disability, and up to ₹1 lakh in case of partial permanent disability.

APY (Atal Pension Yojana): As of 2015 May, only 11% of the Indian population was covered under pension scheme and this scheme aims to increase that percentage. The scheme is targeted mainly at the unorganised sector, to provide the government backed pension. Minimum age required to join the scheme is 18 years and a maximum is 40 years. The start of pension under the APY scheme would be from 60 years, and the contributor would have to pay the premium for at least 20 years (or more).

Sovereign Gold Bond Scheme: Under this scheme, instead of holding physical gold, Government securities are denominated in grams of gold. On behalf of Government of India, Sovereign Gold Bond (SGB) is issued in paper format and demat format by the RBI.

Digital Village: This initiative was started in order to empower rural India by connecting them digitally so that they can avail the benefits of financial inclusion. Many banks have adopted villages under this scheme and Vijaya Bank was the first Public Sector Bank to take the initiative forward. The bank adopted Chandagalu village in Karnataka's Mandya district and helped it transform into a fully digital village. Read more about the initiative here.


These are some of the Social Banking initiatives implemented by the Government of India, to provide banking for the underprivileged section of our society who make up the majority of our population.



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