• search

Corporation Bank initiates an unique pilot project

Written by: Staff
Subscribe to Oneindia News

Panaji, Oct 28 (UNI) An unique pilot project to empower grassroot people of hitherto non-banking villages of south India and Goa is underway under the aegis of three public sector banks.

The trio, Corporation Bank, Oriental Bank and the Indian Bank have recently forged a strategic alliance to offer a comprehensive, credible synergic business model benefitting 284 villages, ''going beyond the prescription of the Reserve Bank of India''.

''We have launched a survey with the help of students for this financial inclusion approach, so that viable business models of the villagers' choice covering even dairy and sericulture could be evolved. This envisages providing them with physical and digital connectivity using 'Simputer and Smart Cards','' Corporation Bank's chairman-cum-managing director Mr B Sambamurthy said.

Sharing the bank's new initiatives with media persons here today, Mr Murthy said the bank was going beyond the RBI prescription to benefit the rural areas located in Andhra Pradesh, Karnataka and Tamilnadu besides 35 villages in South India.

The house-hold survey was expected to be over in six months and it was expected to open 1.5 lakh new accounts besides fulfilling the business aspirations of the individual villagers on merit basis to help mitigate rural poverty and unemployment.

Referring to a spate of farmers' suicides in the country, Mr Murthy said the phenomenon was basically due to ''over indebtedness to unscrupulous moneylenders, price crash and lack of marketing capabilities, but not due to non-availability of bank credit.'' More than 98 per cent of the 30,000 rural branches in six lakh villages are under the coverage of public sector banks, thus each branch accounting for 20 villages which is difficult to manage and hence the alliance is working out a new business model, Mr Murthy said.

''We require a holistic approach and appropriate risk management profile to tackle the suicides galore to reduce the vulnerability of the farmers,''the bank chief said.

The incidence of suicides could further be reduced if the farmers were guided to taking to the commodity market so that they could surmount price crash situations. This again requirs educating the farmer and grouping them to generate commodities of scale, he explained.

The three banking alliance partners would arrive at an appropriate Information Technology model suitable for the villages under survey involving cost efficiency and flexibility.

Reducing intermediation costs for enhanced access to the villages and knowledge sharing were one of the factors behind arriving at the strategic alliance among the three banks for rural banking model,the corporation bank chief said.

This strategic alliance was further expected to generate economies of scale and scope with new products of payments through paper, cards and electronic system besides meeting the capital and equity markets.

The three were also planning to commence operations at about 7 places in South East Asian countries jointly so that they could share the expenses and derive symergic benefits, the CMD disclosed.

The symergic benefit could be tremendous if combined operations using scores of branches and ATM network of the three banks were set in motion, benefitting the customer to a great extent, he explained.

All this results in cost cutting, pooling of resources and getting discount benefits in IT procurements and joint tenders, could be passed on to the consumers in the long run, he added.

UNI BM WD SKB1524

For Breaking News from Oneindia
Get instant news updates throughout the day.

X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more