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SBI looking to sell products via e-gram

The Gujarat government-pioneered e-gram project, which aims to facilitate e-governance initiatives in villages through a central information and communications technology (ICT) system could soon also act as a business facilitator for banking products.

State Bank of India (SBI) is working on this project, which would see e-gram kiosks be able to facilitate checking of account balance, deposits, loans, insurance and other banking services through the Internet in tandem with the nearest SBI branch.

“This is for the first time a project like this would be taken up in the country. Through this service, people from rural areas who live far away from a bank branch will be able to avail of banking products without having to personally visit the nearest branch,” said HC Pattnaik, chief general manager, SBI (Gujarat).

He added that Vadodara and areas near the city would in most likelihood get the nod for the pilot implementation of the project.

SBI’s branches are under the core banking system and modalities are being worked out on whether the rural ICT kiosks would be compatible with the technology or a new platform would have to be created. The bank is looking at targeting more than 5,000 rural ICT kiosks in the next one year to double up as its banking facilitator.

Under the Reserve Bank of India guidelines, banks are permitted use of services of non-governmental organisations/self-help groups, microfinance institutions and other civil society organisations as intermediaries in providing financial and banking services through the use of business facilitator and correspondent models.

A business facilitator can undertake identification of borrowers, collection and preliminary processing of loan applications, marketing products and follow-up for recovery whereas a business correspondent can undertake activities such as disbursal of small value credit, recovery of principal or collection of interest and small value deposits.

The bank’s other rural initiative, SBI Tiny account, could also come to Gujarat this year. The initiative will enable villagers to start a bank account with deposit amount as low as Rs 50. The account can be maintained with zero balance.

Also, a business correspondent for SBI can use his/her cellphone to record transactions which, in turn, is connected to a central server in Mumbai. The project is currently being piloted at Arunachal Pradesh and Uttar Pradesh.

“We are looking at business from facilitators and correspondents to go up increasingly. In the next two years, we could earn as much as Rs 1 crore per year from each of the facilitator centres we associate with,” said Pattnaik.

Under the business facilitator model, SBI has already signed an MoU with India Post to act as a facilitator for 50 post offices in a pilot project at Surendranagar, Anand and Bharuch districts in Gujarat. It has also signed up with Gujarat Agro Industries Corporation to market the bank’s products in 700 outlets of the 1,200 outlets in the state.

Further, SBI is looking at milk unions as facilitators. It has signed MoUs with Sabarkantha Dairy, Dudhsagar Dairy and Amul. The bank is looking to tie up with 7-8 more co-operatives in the next one year.