Use technology to up financial inclusion, RBI tells banks

Reserve Bank of India (RBI) deputy governor, K C Chakrabarty, today asked banking sector to extensively use the technology and Business Correspondents to reach out to the masses. The help of Business Correspondents (BCs) has eased the burden of banks to expand, he said.

Speaking after launching 150 branchless banking units of Corporation Bank, here today, he said there was no compulsion from RBI that banks should make use of BCs to increase financial inclusion, but it was in the interest of banking sector to do so.

“Technology is no longer a choice, it is a compulsion. The banks should make use of technology in a large way and scale up the branch network. If the banks can not scale up using technology then the idea of financial inclusion and inclusive growth will fail. The banks have a responsibility to include everybody in the banking process,” he said.

With the opening of 150 branchless banking units across six states the Corporation Bank’s network of Grameen Vikas Kendras has gone up to 568 as part of its financial inclusion programme.

Corporation Bank, one of the early movers in implementing branchless banking model, started this project in 2006 and is presently operational in more than 560 villages. By end of the current fiscal, the number will be increased to 2,000 villages, J M Garg, chairman and managing director, Corporation Bank said.

The bank also plans to roll out micro-insurance and facilitate transactions using the mobile phones through the Business Correspondents, he added.

Branchless banking is a technology enabled, low-cost, alternate delivery channel that facilitates basic banking services to the rural communities at their doorstep through Business Correspondents at an affordable cost in a secure manner. It facilitates customers to transact from their villages and at their convenience and save or withdraw small amounts depending upon their need, without the hassles of filling up a challan for depositing cash or withdrawing money.

The Corporation Bank has provided customers with a Smart Card, which acts as an e-purse and e-passbook and holds multiple accounts of the customer. Today, the bank opened branchless banking units in Karnataka, Andhra Pradesh, Kerala, Gujarat, Haryana and Tamil Nadu.