Long Term Plans for Agri­cul­ture NITI Aayog Ropes in States

While launch­ing its bank­ing ser­vices in New Delhi, Samit Ghosh, Man­ag­ing Di­rec­tor, Ujji­van Small Fi­nance Bank spoke to R&M on its ru­ral foot­print

Rural & Marketing - - CONTENT -

You are fo­cussing on serv­ing un­served, un­der­served and ru­ral cus­tomers. RBI man­dates that at least 25 per­cent of bank’s branches have to be in the un­banked ru­ral ar­eas. So, would you be Just Ful­fill­InG tHE 25 pEr­CEnt cri­te­ria or would go beyond that?

We started as an ur­ban mi­cro­fi­nance in­sti­tu­tion. After that we ex­panded to the semi-ur­ban ar­eas. To­day, our cus­tomer base is equally di­vided into ur­ban, semi-ur­ban and in ru­ral ar­eas. Al­ready one third of our cus­tomers are based in the ru­ral ar­eas which are served from the semi-ur­ban branches. But, we are re­quired by as per RBI guide­lines, 25 per­cent of our branches would be in the un­banked ru­ral ar­eas. Those are pure ru­ral branches.

Would you go through busi­ness cor­re­spon­dence moDEl or tHrouGH Full flEDGED bank branches?

No, we are go­ing to ru­ral cus­tomers di­rectly with full fledged ru­ral branches. The Re­serve Bank of In­dia (RBI) has lib­er­alised the branch au­tho­ri­sa­tion pol­icy and also widened the role of bank boards, mak­ing them re­spon­si­ble for com­ply­ing with the new guide­lines. The RBI re­moved the re­stric­tion on tier-I branches, which was ear­lier linked to the num­ber of branches opened in the un­banked ar­eas. With new guide­lines in place we are in a po­si­tion to go for full-fledged bank brances model and adopt busi­ness cor­re­spon­dence if re­quired.

The small banks sub­sidiaries are be­ing merged with their par­ent banks in the cur­rent sce­nario, and they charg­ing ac­count hold­ers for their ser­vices. Whereas, you are pro­vid­ing all cus­tomer ser­vices with zero fee. So how would you run the bank?

We don’t have min­i­mum bal­ance re­quire­ment. Our strat­egy is to en­cour­age cus­tomers to open more and more bank ac­counts for all the trans­ac­tions.In our study, we found that the min­i­mum bal­ance charge is the point of big re­sis­tance with the cus­tomers. But, if you make the process of trans­act­ing with the bank very easy, then peo­ple will trans­act and keep bal­ances in the ac­counts. That’s our strat­egy. Let’s see how it works.

Samit Ghosh, MD and It­tira Davis, COO of Ujji­van SFB un­veil­ing the debit card

Samit Ghosh

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