Reaffirming his commitment of providing the basic banking facilities to its customers and enhancing adoption of cutting- edge technology to empower people to avail services through their smartphones, Punjab & Sind Bank’s Executive Director Mukesh Kumar Jain in tete-a-tete with Vishwas Dass of Elets News Network (ENN), talks about the changing dynamics of FI
What initiatives Punjab & Sind Bank has taken towards financial inclusion?
Punjab and Sind Bank (P&SB) is a small bank, but we have taken some extraordinary initiatives that set us apart from other leading banks. We are the leader in terms of zero-balance accounts.
At present, there are 36.5 percent zero-balance accounts in the industry and P&SB alone has eight percent of these. Moreover, we have adopted Business Correspondent (BC) model and are directly appointing them, which is proving to be successful. 95 per cent of our BCs are certified from the Indian Institute of Banking and Finance and 100 per cent of our Regional Rural Bank BCs (RBBCs) have qualified requisite exams. Besides, we have adopted latest technology like our hand-held devices which are interoperable through RuPay cards.
Another ongoing initiative is one wherein a person can take overdraft (OD) facility at any ATM or BC micro-ATM. He can go to any ATM and ask for OD facility without facing any trouble. The trials for this facility are going on and would be commissioned soon. In addition to it, we have organised financial literacy camps where we have covered 150 villages and on an average 300 people are being imparted financial education every day.
The P&SB has issued passbooks to all its customers and we have also opened around 13 lakh accounts under the financial inclusion scheme. The bank passbook gives a kind of confidence to the villagers and inculcates faith in customers. 99.6 percent of our customers have already been issued RuPay cards and 88 per cent of them are even active. Normally, people seldom use RuPay cards but our customers are regularly using them. We are striving to provide more and more credit facilities to our customers which would be profitable for both the banks as well as the customers. The Punjab & Sind Bank is also endeavouring to fulfill the key performance indicators set by the Government of India.
Financial inclusion (FI) is not a new concept. What is the difference between the initiatives undertaken by the incumbent government and the previous governments?
In April 2005, the term FI was heard for the first time from the Reserve Bank of India (RBI) and then from 2006, it finally started with no-frills account which has recently been named as basic savings bank deposit accounts. Earlier, the focus was on the villages but now the government is focusing on every household irrespective of the place. Besides, the incumbent government is also issuing RuPay cards, which is empowering people.
Insurance schemes have been added free of cost to the account holders. Also, Know Your Customers (KYC) norms have been made very easy. Now, people in rural areas can go to the branch and paste their photos on a piece of paper and open an account which was not possible earlier. However, they then have to produce a valid document within a year to prove their authenticity. Interoperability has been made mandatory to help people make transaction from anywhere. Besides, many banks are focusing on mobile banking. Even if people have a basic phone, they have been empowered to send the money. At the moment, zero bank accounts have come down to 36.5 from earlier 75 per cent. The government has also prescribed that banks should pay ` 5,000 to the BCs because unless you pay adequate money to the BCs, they would not take their work seriously. As of now, they are discharging their duties effectively because of the additional incentives provided by us.
How do you perceive the Pradhan Mantri Jan- Dhan Yojana?
The PMJDY has certainly proved to be a game-changer for the country. This is the best way people can be brought under the ambit of financial inclusion. Now gradual up-gradation is taking place. For example, initially we started with saving accounts then government introduced credit, OD and remittance facilities. Remittance is a very much required facility. Then insurance and pension schemes have already been provided by the government.
Please elaborate how technology has been adopted by your bank for FI implementation. Also, what is the benchmark that the industry should set for evolving technologies in this sector in the years to come?
We have adopted cutting edge technologies and our devices are eKnow Your Custmer (eKYC) and Aadhaar Enabled Payment System (AEPS) compliant. If a person has to open an account, he only needs to give his finger print impressions as entire data would be fetched from Aadhaar. A large number of accounts have already been opened through eKYC also because it takes very less time. Now people need not turn up at the branches every time they want bank services. I believe we should leverage mobile technology for the convenience of people. The mBanking is the future of banking. Now people can even avail banking facilities from their basic phone. Internet penetration in the rural pockets also needs to be increased to help people avail mobile-based services. The government has permitted Regional Rural Banks (RRBs) to do transaction through internet which was earlier not permissible.
Punjab & Sind Bank is the leader in zero-balance accounts. In the industry, there are 36.5 per cent zero-balance accounts and P&SB alone has eight per cent of it
How important is FI for India? Kindly elaborate challenges involved in effecting FI?
The banking industry has grown both vertically and horizontally but still that has not kept pace with the demand in the country. For any economic growth, banking industry is the lifeline of the country. One has to be connected through the banks to avail banking, insurance, remittances and other key facilities. Connectivity is a major issue which needs to be resolved and strengthening of the telecom signals to carry on transactions—particularly in remote parts of the country. Besides, lack of financial literacy is also a challenge. People need to understand that they need to pay their loans in time. Financial literacy is still very low in the country, which needs to be enhanced through aggressive campaigning. We are sensitising people about many government schemes. We also make them aware that they need not pay the BCs. Regional and caste diversity is another issue in the rural parts of the country due to which we usually appoint local BCs those who understand regional issues and are accepted among the villagers. Keeping the accounts active is also a challenge, which can be met through the process of Direct Benefit Transfer (DBT) for all types of government subsidies, pensions, MNREGA payments, etc.