The Hindu Business Line : Corporation Bank model for rural areas working well

A steady growth in the number of transactions with more number of small amounts being transacted shows that Corporation Bank’s branchless banking model is gaining acceptance among people in these hitherto unbanked areas.

According to Mr B. Sambamurthy, Chairman and Managing Director, Corporation Bank, “Branchless banking is by the villagers and for the villagers.” In this model, the bank appoints a business correspondent in an unbanked area who uses modern biometric smart cards and voice-guided systems to provide secure banking operation for rural people without any barrier on timings.

The bank has implemented branchless banking model at 33 places till March-end.

Mr Sambamurthy told Business Line that one of the more important takeaways for the bank was that deposits were higher than withdrawals . One of the reasons was that even small deposits (as little as Rs 10) were accepted. During March, the branchless banking model conducted more than 1,400 transactions, involving more than Rs 5.95 lakh. Of this, deposits were over Rs 3 lakh. More than 700 unique customers availed themselves of this facility. Earlier, people did not bother to save small amounts either due to lack of a bank branch in their village or the amount spent on travelling to the nearest branch. Mr Sambamurthy said he observed customers saving these tiny amounts of money for their children’s education.

“Nearly 80 per cent of the people who come to operate are women. That means there is empowerment of women in villages,” he said.

To add more units

Enthused by the response for this model, the bank is planning to increase the total number of these units to 100 by the end of May. Biometric smart cards have already been issued in these places. Operationalisation and finding a suitable business correspondent are going on.

The bank is concentrating on Karnataka, Andhra Pradesh, Tamil Nadu and Kerala for implementing these units.

Ruling out possibilities of charging for this model, he said charges will act as a deterrent. “If I charge for this, the person who comes every day for transaction may do it once in a week or so. That money could be misused for other purpose. I am not incurring much expense with this, and trying to keep the cost as low as possible,” he said.

Branding soon

Corporation Bank is now planning to brand the branchless banking model. Mr B. Sambamurthy said that branchless banking is a concept. For the customer, there should be a brand. “We are planning to give a name like ‘Corp Bank Gramin Vikas Kendra’. That is the name we have almost zeroed in on. The branding exercise will begin soon,” he said.

At present, the branchless banking model offers products such as savings bank, general credit card to its customers. Loan and remittance products are offered in some units. The smart card in branchless banking offers as many facilities as possible.

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