Money & Banking

Corporation Bank ties up with BPCL for urban financial inclusion

Anjana Chandramouly Bangalore | Updated on January 06, 2011 Published on January 06, 2011

Bagalore:23/07/2008. Long queue seen in one of the petrol Bunks in Basavana Gudi due to shortage in Diesel supply in Bangalore on Wednesday. Photo: Bhagya Prakash K   -  The Hindu

NO FRILLS BANKING





Sharath Kumar is a young auto driver in Mangalore, who starts work early in the morning and finishes late in the night. He earns about Rs 300 a day, and manages to save about half his earnings.

He has neither a bank account nor the time for banking transactions, and so is still out of the banking fold. It is people like these that Corporation Bank is targeting in its new financial inclusion initiative for the urban centres.

The bank has tied up with oil marketing company Bharat Petroleum Corporation Ltd (BPCL) to provide basic banking facilities for small-distance commercial vehicle drivers, auto drivers, conductors, cleaners, etc through the business correspondent (BC) model. It has already set up handheld devices in about 10 BPCL outlets that will enable deposit,withdrawal of cash through smart cards.

Smart cards

“We want to encourage the habit of saving among these people, and since they pass through these outlets regularly, we are ensuring that they can withdraw money and also load money since these accounts are operated using smart cards,” Mr Ramnath Pradeep, Chairman and Managing Director, Corporation Bank, told Business Line.

The bank would also offer a micro-insurance product to the no-frill account holders that would have a maximum cover of about Rs 50,000.

According to Mr K. Rama Murthy, General Manager – Financial Inclusion, Corporation Bank, the bank sees an enormous potential in this urban financial inclusion initiative.

Campaign to inform

“We plan to scale up to about 100 outlets in urban and semi-urban locations before March-end,” he said. The aim is to achieve an optimum of about 500 no-frill accounts in each of these locations.

According to bank officials, the oil marketing company would identify the location for this initiative, and both Corporation Bank and BPCL would start a campaign at the proposed location to educate the people on the benefits of banking and also understand their needs.

“We then start opening no-frill accounts with zero balance, and once the smart cards are issued, we encourage the account-holders to do transactions,” said Mr Rama Murthy. The BPCL outlet owner or employees working in the outlet would also be the BC for the bank.

While the bank would invest in the handheld device and smart cards, the oil marketing company would pitch in with the real estate part of the endeavour. Corporation Bank started the pilot for this initiative in November 2008 in three BPCL outlets; the bank added about seven last year, and has garnered about 7,000-8,000 accounts so far.

There are another 10 locations in various stages of establishment, pointed out Mr Rama Murthy. “We want to scale it up further in the next fiscal also,” he said, without divulging other details.

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Published on January 06, 2011
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