“I want to see every person in the state to have a bank account,” says Praveena Kala. In conversation with Souvik Goswami & Kartik Sharma
Please tell us about the status of banking industry and the role SBI in the state of Jharkhand.
Banks, basically, have to do two things traditionally take deposits and give credit. But, beside that PSU banks are also becoming partners with the state governments for various welfare schemes. Previously, government used to give subsidy directly, and to the producer. But that model has also changed. Now government is moving from that model to the model of giving subsidy to an individual. So, how does an individual get the subsidy without any middleman? There comes the role of banks. For example, I can tell you that in Japan, more than 100 per cent of their GDP pass through the banking channel, whereas in India that percentage is mere 50 per cent of its GDP. It means that all the money is not going through the banking channel in our country, and if it is not going through the banking channel then the money is not going for the development of the country. In this context bank has to play an important role. Fortunately, the credit-deposit ratio is very good in the state of Jharkhand, and that is applicable for SBI and other banks also. It is because of the state being highly industrialized, lots of mining activities take place here and naturally banks have lots of exposures here. But the problem is that the individuals are yet to be touched or fully touched for various activities of the banks. What I am trying to say is that banks’ reach should be more in the state.
Another thing, I would like to point out that earlier in India, we taught our people to take loans, but we never taught them to save. So, they never had the habit of saving, and if you don’t have saving habit how can you then payback that loan. This was one of the problems in our country. But, fortunately, now in this state we are opening up accounts in a massive way. In Jharkhand, SBI alone has more than 60 lakh savings accounts in the total population of 2.79 crore. We also have no-frill accounts of more than 7 lakhs, where average balance is mere Rs 400. It has been considerably improved. There was a time when no-frill accounts were opened with the average balance of only Rs 40 to 50. We have achieved this through lot of financial literacy program. We are always telling people to learn to save and that makes your horizon go up. Otherwise, one will be stuck at one point. So that has to happen for inclusive growth, and that is basically financial inclusion.
What are the challenges in Jharkhand for SBI?
The biggest challenge is that some of the areas are inaccessible and connectivity problem is also there. Another challenge is that Jharkhand is LWE affected and some time back our 3 officers were kidnapped. It is a challenge in itself. At present, challenge is also coming in form of stressed economy which is resulting in closure of big plants, and that is affecting our business.
“In Jharkhand, SBI alone has more than 60 lakh savings accounts in the total population of 2.79 crore”
What steps have been taken by SBI for financial inclusion in Jharkhand?Also, shed some light on the viability of Business Correspondent (BC) model for financial inclusion.
We are aware that we have to implement this program successfully. Lot of onus is on us, as SBI is the largest bank of the country. It is our responsibility to do it in the best possible way and that is why we have a separate vertical in our bank which looks after rural banking and financial inclusion. In Jharkhand, we have 3 chief managers stationed in Ranchi, Deoghar and Dhanbad, and lot of managers working under them for financial inclusion. So, it brings focused approach for inclusive growth. We have done well in AADHAR seeding also, and we have more than 4 lakch accounts. As you know that DBT started in Ranchi district and 80 per cent of DBT was done through State Bank of India.
As of now, BC model is working well in Jharkhand. Initially, there were some problems. To overcome some of the problems, we are trying to ensure that transactions through BCs are done through voice activation devices. I am always pushing for this as confidence building is very important, and voice activation gives confidence and trust to the people.
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Please share with us some of the ICT initiatives being undertaken by SBI for better service delivery.
If you have mobile, you are carrying bank with you. It is becoming that simple with the use of mobile and technology. You won’t believe how well people are using mobile banking in the rural areas of the state. I think we have at least 20 percent of our account holders who are availing mobile-banking services.
Internet banking is also there, and I think if you don’t have a vibrant IT program, you cannot survive in this market and SBI has got one of the best IT platforms. Apart from these, we have cash-deposit machines in district headquarter branches, and we are going for e-corner program also.
Please share your vision for SBI in the state of Jharkhand.
My vision is that every person in Jharkhand must have a savings account. Here I have seen people living for the day. I think, until and unless they learn to save, they can’t progress. It also improves the horizon.