After a successful rollout of core banking facilities, cooperative banks in Gujarat are now planning to launch internet banking and mobile banking for the first time in India.
With support of the Gujarat Urban Co-Operative Banks Federation (GUCBF), Gujarat State Cooperative Bank - a scheduled bank of Gujarat - has created an umbrella platform under which all the cooperative banks of the state will be able to provide net banking facilities to their customers.
Since maintaining server and technology is not affordable for small co-operative banks, the federation is now in the process of linking smaller banks with big co-operative banks. According to the National Federation of Urban Co-operative Banks and Credit Societies (NAFCUB), only Gujarat is currently active in technology adoption; the former has asked other states to do the same.
More than 260 co-operative banks, with a branch network of more than 2,000 branches across Gujarat, will come under this umbrella, which would enable them to provide technology-driven services to their account holders or customers.
The Reserve Bank of India (RBI) has asked all the states to set up umbrella platforms for technology support, but Gujarat is the only state in India that has implemented the concept.
"The basic idea behind it is to support small banks in technology so that they become able to provide technology-driven services, such as net banking and mobile banking. Gujarat is the first state in which cooperative banks will be on net banking and mobile banking platforms in the county," said Jyotindra Mehta, director of NAFCUB and president of GUCBF.
According to Mehta, Gujarat was the first state to implement core banking solution (CBS) in the country.
Mehta added, "The co-operative model is very strong in Gujarat, which is why the state is always performing better than other states of India."
It is not affordable for small co-operative banks to create and maintain net banking and mobile banking platforms, and so RBI has asked every state to create this kind an umbrella to provide technological support to every bank for further developments.
Vinod Shah, general manager of Gujarat State Co-operative Bank, said, "Individually, technology adoption costs around Rs 5 crore, which includes server, application software, manpower and infrastructure. This may not be affordable for every bank.
Gujarat State Co-operative Bank has created infrastructure, while GUCBF will help co-operative banks to link with it. Almost half of the state's banks have already been covered under the umbrella.
"Almost half of the cooperative banks have been covered in the technology umbrella project and the rest will be in it in near future. We are educating the banks by organising seminar about it," Shah added.
Most of the banks are prepared to start the net banking facility, but it will take some time for mobile banking since each bank needs to get permission from RBI. So far, RBI has given permission to four co-operative banks, of which two banks - Gujarat State Co-operative Bank and Ahmedabad District Cooperative Bank - have received approval. The rest of the banks are from Tamil Nadu and Himachal Pradesh.