‘Participation in socially-relevant projects contributed to EDCB’s brand value’

Kerala has a three-tier State cooperative credit structure with Kerala State Cooperative Bank at the apex level, 14 DCBs at the district level and more than 1,600 PACS at the ground level. These PACS with 15 million clients hold nearly ₹60,000 crore of public deposits, constituting 70 per cent of the total deposits held by all PACS in the country. Since these PACS are very strong in Kerala, there is a need to find ways to keep customers within the cooperative fold.

They need to ensure that clients of PACS get all the benefits of a modern bank account – direct benefit transfers (DBT) of the government, getting subsidies into their individual accounts, and ensuring that they are able to use debit/credit cards across the banking network/ATMs throughout the country. Both SCBs and DCBs have access to the National Payments System. Not so for the PACS, though. Their isolation from the payments network meant loss of their customer base in the post-DBT scenario. ECOBANet seemed the right answer for this vexing problem faced by PACS.

How have you managed to grow despite a slowdown in the economy?

It is true that EDCB has been able to withstand the slowdown to a great extent. Two notable reforms have immensely contributed to business growth.

These are fee-less banking services (free banking) for all in the cooperative banking fold in the district and the introduction ECOBANet for member societies. The introduction of fee-less banking has had a profound impact on the public at a time when PSU banks have been imposing various service charges and levies on customers. It created more business opportunities and set the stage for rapid expansion. The new loan product, Express Loan, designed mainly for government employees, also received widespread acceptance.

How do you propose to further bring down NPA levels?

Unlike other DCBs in Kerala, we have advanced high-value loans to many infrastructure development projects initiated by the government. Default in repayment of some of this institutional credit had adversely affected our NPA position.

However, strict recovery measures have been employed to reduce the level of NPAs expeditiously. The government is also seriously engaged in resolving this issue. Despite these hurdles, we believe that participation in these kinds of socially-relevant projects have immensely contributed to the brand value of our bank.

Rural distress has been a problem for commercial banks. How have you solved that problem?

Our experience has shown that rural distress has never adversely affected our growth prospects. Of course, the challenges encountered were many and unprecedented. But our focus has always been on the poor, the middle-class and the excluded sections.

Out interest-free loans to customers who suffer from fatal diseases such as cancer and renal ailments, and scholarships given to students, received widespread recognition. We also extend concessional finance to JLG/SHG groups engaged in various kinds of productive, income-generating activities. Credit is also being extended to Farmers Clubs formed at the initiative of our branches.

Your initiative to provide mobile ATMs helped draw those from the fishing community into the banking fold. What are your expansion plans?

We were able to visualise the importance of financial inclusion as far back as 2007, strictly in line with the Rangarajan Committee report. The two novel projects – Bank on Waves (bank functioning in a boat) and Bank on Wheels (bank functioning in a van) – were introduced in 2007 to reach out to fishermen living in very remote, un-banked and under-banked areas. Our future effort will be to bring tribals and other backward communities into our fold so that various governmental and other social aids could be passed on to them without any obstacles.

We are proud to announce that we have already achieved a capital adequacy of as high as 15 per cent in 2017, which is much higher than the ratio stipulated by law.

It is noteworthy that no other DCB in the country has attained this level of capital adequacy.

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