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New-age Banking at YOUR FINGER-TIPS

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Dr R C Lodha , Executive Director, Central Bank of India, in an interaction with Arpit Gupta of Elets News Network (ENN) , speaks about the various financial inclusion- related programmes initiated by the Bank and other steps taken by them to provide new-age banking to the customers

Dr R C Lodha Executive Director, Central Bank of India

Dr R C Lodha
Executive Director, Central Bank of India

Give an overview of the financial inclusion- related initiatives of the Central Bank of India.

First financial inclusion programme in India was initiated by the Reserve Bank of India in 2005 with an aim to bring the financially-excluded population of the country within the ambit of regulated financial institutions. Our country has a huge population and more than 60 per cent of them live in villages. Since the launch of financial inclusion programme in 2005, lots of efforts have been made in this direction by the stakeholders. But numerous problems arose during the course of its implementation and passing on benefits to the ultimate beneficiaries. Had these hurdles not been taken care of properly, the ultimate aim of the programme to pass on the benefits to the poor could not have been achieved.

What are the new customer-friendly products/ services introduced by the Central Bank of India?

Only a third of India’s 1.2 billion people have bank accounts, whereas over double that number – some 900 million people own mobile phones. So, there’s an irony in that comparison. Today, bank customers look forward to facilities like:

  • Queue-less banking
  • Paperless banking
  • Quick and speedy banking and
  • Mobile banking

So , in line with their expectations, our Bank is already providing all facilities through various platforms like:

  • CBS branches
  • Net Banking, which added a new feature of online ITR filing
  • Mobile Banking, which has the feature of Aadhaar seeding and NEFT
  • Micro ATM-equipped BC outlets that enable customers to transact or open accounts using e-KYC as well as the conventional method
  • SMS Banking, which facilitates balance enquiry, in addition to SMS alerts, etc.

Also, as per government directives, the Bank had launched an insurance-focused scheme, called Suraksha Deposit Scheme, with various customer-friendly features.

Complexities in Implementation of Financial Inclusion
  • Often, illiteracy is an obstacle in reaching out to the financially-excluded and bringing them to the banking stream. If one cannot read or understand a bank receipt, how one can be confident that he has received the correct amount?
  • Lack of awareness and trust in parking money in the banking channel
  • Involvement of middlemen in passing on benefits to ultimate beneficiaries under various government schemes
  • Lack of accessibility to banking facilities due to absence of brick and mortar branch network
Technology up-gradation and human resources skilling at Central Bank of India
  • The Bank through a network of its branches and Business Correspondents is connecting more and more people and bringing them into banking channel, so that banking services and various government benefits could reach them directly
  • To reach last-mile connectivity, the Bank is aiming to open at least 25 per cent of its branches in rural areas. Apart from this, more than 6,000 BC outlets and over 3,500 Ultra Small Branches have been set up by the Bank under the financial inclusion programme
  • Extensive manpower in the form of BC Agents (BCAs) or Bank Mitra has been engaged at each BC outlet which covers at least 1,000-1,500 households in an area
  • As far as technology is concerned, the Bank is using one that is universal throughout the country and each customer is connected to the Bank’s CBS network, which enables them to transact with any BC outlet or branch from any part of the country
  • Bank has also introduced the functionality of account opening through e-KYC
  • By training BCAs/Bank Mitras, they are being skilled in use of latest technology, apart from bringing awareness on various banking products and services amongst the masses
  • To bring about financial literacy amongst the masses in mission mode, the Bank has set up 48 Financial Literacy and Credit Counselling (FLCC) centres at 48 district headquarters in nine states of the country
  • The Bank has introduced a passbook f or BCAs, which contains broad guidelines about their roles and responsibilities, payment structure for various activities, monthly work done by them on various parameters, like account opening, transactions made, enrollment canvassed under social security schemes, etc, and remuneration paid to them every month. It is updated by BCs themselves and authenticated by the base branch, and has to be made available to all officials visiting them from the Bank, RBI, DFS, etc. The process ensures timely payment to BCAs and motivates them as and when their work is appreciated by the visiting officials
  • The Bank has completely replaced the smart card-based ITeFI solution with IFIS, which enables a customer to transact through bio-metric identification and duly verified through Bank’s central authentication server. It has reduced the burden of smart card from the FI network

What new technologies have been introduced in the financial inclusion and payment systems domain in the industry in the recent times, and how updated is the Central Bank of India in this regard?

In the recent past, the following technologies have been introduced by the banking industry and our Bank is implementing/operating all these technologies successfully:

  • Aadhaar-enabled Payment System – On-US/Off-US
  • RuPay card-based payment system – ON-US/OFF-US
  • Interoperability amongst banks based on AEPS and RuPay card
    • IMPS – Immediate Payment Service – at BC locations intended to offer the following services for inter bank fund transfers are active in our bank. We are also going to introduce it in our BC channel:

    • Person to Person (P2P) – Transactions can be initiated using mobile phone by entering the mobile phone number and MMID of the beneficiary
    • Person to Account (P2A) – Fund transfer is done using the beneficiary’s Account Number and IFS Code of the beneficiary bank
    • Person to Merchant (P2M) – This is to facilitate commercial transactions in a similar mechanism as the above two, and
    • Person to Aadhaar (P2U) – Transactions can be done using beneficiary’s Aadhaar number

How do you leverage social media and analytics for ensuring customer satisfaction?

Keeping pace with the changing banking environment, we have shifted our focus from traditional push method to electronic method of communications, like advertising, direct e-mail, Point-of-Sale displays, engagement through Facebook interaction, Twitter, Mobile Banking and m-Passbook, in addition to the internet banking facility. The effective use of social media tools is improving customer satisfaction and driving business expansion through acquisition of new customers. These modes of communications are more popular with the new generation customers .

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