Bank of Baroda considering a subsidiary for financial inclusion business

Focusing on opening cash recyclers instead of new ATMs

With a sharp rise in the number of new customers under the Pradhan Mantri Jan Dhan Yojana (PMJDY), public sector lender Bank of Baroda (BoB) is looking to float a subsidiary for managing its financial inclusion business.

As many as nine million accounts were opened at the bank under financial inclusion, through PMJDY. In order to better serve this segment of customers, BoB has decided to formulate a business plan for opening a wholly owned subsidiary, the lender said a statement.

The board of the bank held a meeting to review strategy, business plan for the current financial year (2015-16) and a vision statement for 2020.

A BoB executive said while there was a surge in the number of accounts under the financial inclusion plan, the bank would like to maintain and improve the quality of services.

The bank was careful about not hampering normal operations at branches due to an increase in customer base and workload. Hence, the bank was exploring the idea for a separate entity to manage the financial inclusion business, the official said.

The Mumbai-based public sector lender is also changing its strategy for alternate channels. It will focus on increasing the number of cash recyclers instead of automated teller machines (ATMs). More than 2,500 such machines are planned to be installed during the current year in addition to 100 e-Lobbies, it said.

The bank had a network of 8,030 ATMs, 390 cash recyclers and 151 e-Lobbies, besides 5,190 branches in domestic operations at end of March 2015.

The bank also plans to add 50,000 point of sales machines during the year.

For strengthening its overseas operations, the bank is considering commencement of banking operations in neighbouring countries in Nepal, Sri Lanka, Bangladesh and Myanmar.

It is also looking to open representative offices in Vietnam, Indonesia, Brazil, Canada and Russia.