Tamil Nadu rises in banking activities

Chennai: Tamil Nadu has the district’s maximum representation in access to banking services with its 17 districts ranking in the top 50, according to the recent financial inclusion report released by Mumbai-based rating agency Crisil. Crisil has included data by district covering 652 districts in 35 states and union territories for fiscal year 2013 to prepare this report. Pondicherry, Kerala, Tamil Nadu, Goa and Chandigarh are the top five States / Union Territories in the report. This is the first time that Tamil Nadu has climbed to third position with a CRISIL Inclusix score (see box) of 79.2. In the previous ranking, the state was ranked eighth.

The continued progression of banking services along the three dimensions of financial inclusion, namely branch penetration, deposit penetration and credit penetration, is the main reason for this leap. Based on data provided by RBI to Crisil, over 1 crore in new savings accounts have been opened. in the state in fiscal year 2012-2013, resulting in an 11.3 increase in the deposit penetration score to 80.5. At the same time, this is the first time that Crisil has added microfinance institutions (MFIs) in the index calculation.

The State has a very strong presence of large MFIs and programs for linking up with banking mutual aid groups. This allowed the state to have very high credit penetration and branch penetration, thus improving its overall rating. According to Pawan Agrawal, Chief Analysis Officer, CRISIL Ratings, Crisil Inclusix’s high score is a reflection of the company’s financial discipline.
“The state has improved in all banking activities. In fiscal year 2013, the number of savings accounts opened across India was 12 crore. In this, more than a crore came from Tamil Nadu, ”he said.

He added that a better inclusix score meant better economic activity. “It also has an impact on people’s lifestyles because having access to a financial product means that you deposit your savings in a regulated way and that you have more visibility on your savings. If you don’t have access to a financial product, you will put your savings in unregulated methods like chit funds and may lose.
money, ”Agrawal said.

Madras School of Economics principal and professor KR Shanmugam said the state government has promoted many self-help groups in Tamil Nadu which has helped open new bank accounts and increase inclusion. financial state. “In addition, the credit-to-deposit ratio is one of the highest in the country,” he said.

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Michael C. Sumner

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