The idea of branchless banking will lead to a time when the customer will come to bank only for ancillary services like locker operations, says C V R Rajendran, Chairman & Managing Director, Andhra Bank, in conversation with Kartik Sharma & Sneha Mejari of Elets News Network (ENN)
Andhra Bank is one of the pioneers in taking banking to villagers in remote areas using financial inclusion. What were the challenges faced by the bank in practising FI and how were those overcome?
RBI gave permission for use of intermediaries for financial inclusion purposes way back in 2006. Since then our bank has in the forefront extending banking facilities at doorsteps of uncovered households in remote villages. With a view to transferring various government benefits directly to the accounts of customers, there has been a major thrust on financial inclusion. As per the directives of the government, our bank covered all the 1,149 allotted villages with over 2000 population before March 2012. Initially, intermediaries faced problems in appointing Bank Mitras due to lack of awareness. However, intermediaries, in association with banks, have now trained the Bank Mitras and stabilised financial inclusion activities.
How is Andhra Bank leveraging technology for financial inclusion?
We have utilised ICT-based technologies for implementing financial inclusion. Further, we had engaged end-to-end solutions like providing hardware and software to the service providers to install financial inclusion enabling devices. Latest technological products, like opening of accounts through e-KYC, payments based on Aadhaar numbers etc., are available with Business Correspondents (BC). Our bank reigned supreme during September-December last year in opening accounts using e-KYC.
What are the different mediums used by the Andhra bank to ensure robust payment infrastructure and transactions?
We have successfully implemented Aadhaar-enabled Payment System in all devices of Bank Mitras. Now, we are in the process of implementing payments using RuPay Cards, which will be completed in a fortnight’s time. At present, Bank Mitras are depending on smart cards, along with bio-metric authentication of the customer, for effecting payments/ getting receipts.
How is the bank contributing towards PMJDY?
Out of 11.50 crore accounts opened throughout the banking sector industry under PMJDY since 15.08.2014, our bank opened 16.65 lakh accounts, covering all uncovered households in the allotted villages/ wards within the stipulated time, until 31.12.2014. We have issued RuPay Cards to all the 16.65 lakh account holders except minors. As a measure to popularise financial literacy among villagers, we are conducting magic shows and literacy camps at selected locations. We are releasing press releases duly highlighting the usage of RuPay cards for getting the `1 lakh accidental insurance coverage and advising account holders to operate the accounts at least once in 45 days.
Also Read: Aadhaar – Basis of Banking Services : Dr Ajay Bhushan Pandey
Please share your vision on the future of banking services in India.
With the advent of internet banking and mobile banking, the concept of branch banking has given way to branchless banking. The present day new-gen customers do not want to visit bank branches and spend time at bank counters. The day is not far when customers will come to branch only for ancillary services, like locker operations, as their credit needs will also be taken care of through technology.
Today, various means of reaching out to customers, such as mobile phone or BCs, do not mean much in terms of physical proximity to him. What is important is technological proximity, or proximity via BCs. To this end, RBI has liberalised the norms on BCs to encourage banks and mobile companies to form alliances and start the process of licensing payment banks. In order to improve public services, especially targeted at the poor, financial inclusion has a pivotal role to play, which is going to be an important part of future government policies and RBI’s plans in the coming years.
