Social Banking
SOCIAL BANKING
INTRODUCTION
Banking plays a fundamental role in economic progress of a country. It inculcates the habit of savings among people, hence helps in boosting the investment base and speeding up the capital formation. At the same time it also helps out the needy, by providing them timely credit at an affordable cost. But majority of poor rural and semi urban population in India are unable to avail the basic banking facilities. As a result they are made to rely on private money lenders, charging exorbitant interest rates and are trapped in vicious circle of debt. Since independence, the efforts of the Government have revolved around expanding financial institutions to rural and unbanked areas, so as to increase access to formal credit in rural underdeveloped regions. Banks were supposed to concentrate on rendering service to underprivileged people, living below poverty line, and cover more and more unbanked areas rather than just concentrating on their own profitability. Social banking policies were made to shift the focus of commercial banks from ‘’selective banking‟ to ‘’mass banking‟. Social banking is rightly defined by Dr Roland Benediktar (2011) as banking with a conscience. Here the bank focuses on investing in community, providing opportunities for the disadvantaged, and supporting social, environmental and ethical agenda. Rather than just concentrating on traditional bottom line i.e. profits, bank emphasizes on achieving triple bottom line of profit, people and planet.
Core objective and maxims
“Social Banking “describes the provision of banking and financial services that consequently pursue, as their main objective, a positive contribution to the potential of all human beings to develop, today and in the future.
In Social Banking, the focus is on satisfying existing needs in the real economy and the society whilst simultaneously taking into account their social, cultural, ecological and economic sustainability. Furthering the
INTRODUCTION
Banking plays a fundamental role in economic progress of a country. It inculcates the habit of savings among people, hence helps in boosting the investment base and speeding up the capital formation. At the same time it also helps out the needy, by providing them timely credit at an affordable cost. But majority of poor rural and semi urban population in India are unable to avail the basic banking facilities. As a result they are made to rely on private money lenders, charging exorbitant interest rates and are trapped in vicious circle of debt. Since independence, the efforts of the Government have revolved around expanding financial institutions to rural and unbanked areas, so as to increase access to formal credit in rural underdeveloped regions. Banks were supposed to concentrate on rendering service to underprivileged people, living below poverty line, and cover more and more unbanked areas rather than just concentrating on their own profitability. Social banking policies were made to shift the focus of commercial banks from ‘’selective banking‟ to ‘’mass banking‟. Social banking is rightly defined by Dr Roland Benediktar (2011) as banking with a conscience. Here the bank focuses on investing in community, providing opportunities for the disadvantaged, and supporting social, environmental and ethical agenda. Rather than just concentrating on traditional bottom line i.e. profits, bank emphasizes on achieving triple bottom line of profit, people and planet.
Core objective and maxims
“Social Banking “describes the provision of banking and financial services that consequently pursue, as their main objective, a positive contribution to the potential of all human beings to develop, today and in the future.
In Social Banking, the focus is on satisfying existing needs in the real economy and the society whilst simultaneously taking into account their social, cultural, ecological and economic sustainability. Furthering the