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ICICI stress on quality in inclusion drive

Chanda Kochhar (top), Rajiv Sabharwal: The next step

Mumbai, Dec. 22: ICICI Bank is finetuning its financial inclusion strategy by focussing on increasing the volume of transaction and offering diverse products.

The financial inclusion strategy, formulated by managing director and CEO Chanda Kochhar, comes after the private bank achieved huge growth in this area over the past three years.

The lender has opened 1.65 crore zero balance basic saving accounts, the most by any private bank in the country and the second-highest in the industry.

It has reached out to over 15,000 villages through its branches and business correspondents, an increase of over 20 times in the past three years. During the same period, the bank has opened about 400 branches in unbanked villages.

It has also increased its rural and semi-urban branches by about 50 per cent in the last 18 months, taking the proportion of these branches to over half of the bank’s network.

Over the past few years, both private and public sector banks have reached out to rural and semi-urban areas following the stress laid by both the Centre and the Reserve Bank of India (RBI) to bring more people within the banking spectrum. The banking sector has conceded that the thrust is not misplaced as it has a huge potential.

Though banks have been successful in opening accounts over the past three years, experts aver that a significant number of the transactions have been low value or limited to simple credit and debit transactions.

It has also been pointed out that for financial inclusion to turn viable, lenders should concentrate more on increasing the volume of transactions in the accounts opened and offering products such as credit and insurance.

Rajiv Sabharwal, executive director at ICICI Bank, said while the private bank was looking to bring more people into the banking net from rural and unbanked areas, it is concentrating on increasing the volume of transactions from existing and new accounts.

“Financial inclusion is not just about opening accounts but inculcating banking habits at the grassroots level through financial literacy. We have been working with multiple stakeholders at all levels to ensure that this is executed on the ground. The bank’s financial inclusion plan for 2013-16 is built on two pillars — increasing transactions and offering a comprehensive product suite, including government benefit transfer, remittances, savings, recurring and fixed deposits, credit and other products,” he told The Telegraph.

Sabharwal added that while the bank had leveraged various technology solutions for rural markets such as micro-ATMs, smart cards, mobile banking and Aadhaar enabled payments, it has now adopted a “door-step banking” model.

This model is backed by a comprehensive product suite, covering the entire agricultural value chain, including loans to input dealers, crop loans, loans for farm equipment, irrigation and dairy and farmer warehouse receipt finance. A team of 10,000 employees are deployed under this model.

The bank has also set up about 100 credit and operation hubs to expedite loan processing and disbursements.

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