What is the similarity between `uzhavar santhai' (farmers' shandy) in Tamil Nadu and dairy sector in Andhra Pradesh? Yes, they are connected with farmers, and in particular with banking activity of unconventional type -i.e. branchless banking.
While farmers at `uzhavar santhai' in Sivaganga town of Tamil Nadu get overdraft for their business from branchless banking, dairy farmers of Penumuru mandal in Chittoor district of Andhra Pradesh get payments for the milk through this mode.
In 2006, when Corporation Bank introduced `branchless banking' model it catered to the needs of rural masses that did not have access to banking service.
Corporation Bank appointed business correspondents and provided them a simple handheld secure terminal. The customers in un-banked villages are provided with smart cards or RFID (radio frequency identification) cards. These cards include their name, photograph, address, and their fingerprints.
The voice-guidance system from business correspondent's device confirms the authentication of the transaction to both the customer and the business correspondent. Customers carry out basic banking transactions from the comfort of their village and at any time of the day irrespective of the banking hours.
The business correspondent uploads the daily transactions to the bank branch through the telecommunication network.
Mr J.M. Garg, Chairman and Managing Director of Corporation Bank, told Business Line that this model has facilitated thrift amongst the cardholders. New units
The year 2008 saw the operating model of branchless banking units witnessing changes both in size and appearance.
When the bank implemented the branchless banking activity on a pilot basis in two villages of Dakshina Kannada district in Karnataka in August 2007, the size of the unit was almost equal to that of an A4 paper. Now , the size is almost half of that with additional features .
The need for the business correspondents to go in for a separate handset for mobile and land phones has been eliminated in some of the new units as they come with GSM chips in them.
Stakeholders help
The participating stakeholders in the branchless banking project also contributed in the evolution of the operating model.
The handheld device, which takes care of the transaction part of the branchless banking for dairy farmers, is now configured for monitoring the quality and quantity of milk procured from them, after including some features suggested by them.
The latest model of branchless banking unit which supports graphics and has in-built GSM chip.
Every participating stakeholder added some value to the operating model of the unit.
During the year, Corporation Bank went in for branding of its branchless banking units. Now, the bank calls them as `Corp Bank Gramin Vikas Kendras'.
During 2008, the number of branchless banking units of Corporation Bank increased to 202 as against hardly a handful in the previous year. While the first branchless banking unit was opened in Calangute in
Mr J.M. Garg, Chairman and Managing Director of the bank, said that the bank has plans to put in place around 400 such units before the end of this fiscal.
Some of the areas where the branchless bankingfunctioned into include dairy farmers, farmers' shandy, self-help group (SHG) sector, among others.
In the branchless banking model adopted for Chittoor dairy farmers, who are associated with National Dairy Development Board, the payment for the milk poured in a dairy gets directly credited to the account of the farmer concerned, which he/she can transact at the time suitable for him/her.
In `uzhavar santhai', farmers come to the shandy by 5 a.m. for selling the commodities and go back to the villages by 10 a.m. But money for daily turnover is the main requirement for them, and moneylenders are the main source for them. Considering the need for an overdraft facility, the bank introduced the `branchless banking' model in `uzhavar santhai' in Sivaganga on a pilot basis. One of the farmers, who is a business correspondent, sets up a terminal in the shandy and meets the overdraft requirements of the farmers there. For marginal farmers having small land holdings, the overdraft is given at 4 per cent interest . By the time the bank branch opens for public, the business correspondent remits the money at the bank.
SHGs
Branchless banking also made inroads into the SHG segment during the year. In this, two cards (of the authorised members) need to be authorised at the business correspondent's terminal at the time of carrying out the transactions. This saves the time of SHG members who otherwise would have to travel to the branch. It also reduces crowding at the branch as the SHG members carry out the transactions in their villages.
The model was also customized to provide payments in social security pension and NREG schemes.
TRANSACTIONS
The number of transactions and the amount transacted also witnessed growth during the period. The bank, which transacted around 1,000 transactions worth Rs 2.5 lakh in December 2007 (RPT December 2007), saw more than seven-fold jump in transactions and nearly 10-fold jump in amount during November 2008. Branchless banking units carried out nearly 7,700 transactions worth Rs 19.39 lakh till November 2008.
Most of the customers of the branchless banking are women, constituting more than 65 per cent of the total transactions, indicating the women empowerment.
Mr Garg said the bank does not see this merely as a regulatory requirement but also as a viable business model to increase its clientele base and to provide basic banking services at affordable cost to those communities who were hitherto deprived of such facilitiles
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