Reaching out to the Excluded: S S Bhat receives award for Canara Bank at FIPS 2013

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Please share with us the initiatives that are being taken by Canara Bank for Financial Inclusion (FI).
Canara Bank has taken various initiatives for Financial Inclusion (FI). We have adopted a two pronged approach: one is Branch Banking and the other is Branchless Banking. After sensing the psyche of the rural people, we found out that the rural people pay more emphasis in physical branches, which we call brick and mortar branches, rather than the mobile branches. Focusing on financial inclusion, we have opened more than 500 branches in 510 un-banked villages. These physical branches are spread across 600-700 square feet area. These each branches have one manager and one rural officer. The rural officer is generally an agriculture graduate recruited from the campus. They are working with commitment.

What about the financial viability aspect of these rural branches?
Initially we were quite apprehensive about the financial viability. But after conducting the analysis of the results, we arrived at the conclusion that these 510 branches were giving an average of about Rs. 10crore business each. That means these rural areas have a vast latent potential to be tapped. We have recognised that it has got huge potential. While establishing these branches an amazing awareness has been created about our banking system too. Initially people were hesitant to come forward. But when people realized that there money was safe, they were more forthcoming. The rural officers have done an amazing job of developing bonds and cementing relationship with the rural masses. Now there are enquiries and request from adjoining villages too requesting for starting up of banks in their vicinity. They even sometimes assure us to bring business.

‘We have recognised the huge potential of rural market,’ says S S Bhat. In conversation with Kartik Sharma, Elets News Network (ENN).

Please throw some light on the training programs that are aimed at branch managers for better communication with the rural mass.
We give training to the young branch managers who may not have had exposure in agriculture or rural lending. They are given thorough 12 day training in the National Academy of Root City in subjects such as behavioral studies, credit appraisal, understanding of the local people and their credit needs. We have selected these people so that they help and understand their needs of the masses. These managers are trained to develop an attitude of helping the people, understanding and thereby meeting their requirements. We take them to visit some developed village branches and from watching their success story from close quarters they also get enthused and refurbished. That is the advantage of the training and capacity building of these people. We also select 10 unemployed persons from the village and send them to these training institutes.

Later, these trained youth generally come back to the bank for loans and credit and receive our help to set up their enterprises like mobile repairing shop, etc. This has generated a lot of confidence in the rural people about the Canara Bank. In some cases, we take up developmental activities of a particular village. We have done this for a village near Bengaluru. There are about 40-45 families in this village. In this village we got actively involved in road construction activities, drinking water and sanitation as well as established school in the village. This type of confidence building measures and interventions has definitely changed the face of the village. It helped us later to set up branch in that village.

Earlier the banks were given targets and goals by the government which many a times remained unfulfilled. But now we heard about the climbing success graph. Please elaborate on this.
Let me explain it. If our branches opened in 2011-2012 had not given us profits, we would not have gone ahead with more such branches in the unbanked villages. We have opened 272 more such branches because we have seen the potential for expansion. Now, I can even convince the top management of our bank about this financial inclusion initiative. The business that has been brought by these banks is one factor that has made every other bank sit up jump into the fray. The branches in unbanked villages have been upgraded and improved only because we are eyeing more profits in the coming times.

What is your opinion on extending ATM services in the rural areas?
We are next to only the Bank of Baroda which has completed its stipulated number of ATM branches. The Ministry of Finance, Government of India set guidelines that all the existing branches should have onsite ATMs by 31-03- 2013. This year itself we have set up 2700 ATMs. But there are challenges.
The major challenge is to increase literacy level to improve transactions. Now, in many centre 100 transactions are happening but to make that centre viable, at least 225 transactions are needed. ATMs are just the starting point. We have also identified a few agencies for the ATMs. But with education, awareness and increase in the number of debit cards and more footfalls because of NAREGA wages these branches can do brisk business. ATMs are of definite attraction for the people. But in rural areas there is always a little hesitancy in adopting new technologies and ways. Though once they see the benefits, they will surely throng in greater numbers. Maybe 2-3 years down the line some streamlining may be required at few centers, they may be asked to close down. But I feel that such a situation would not arise as government transactions itself would make these ATMs viable.

What kind of support you are getting from various state governments?
All the state governments have been very supportive to us. The Bengal Government has offered us land for the first 5 years at a nominal rate of one rupess. We are also distributing pamphlets in Bengali to generate and increase awareness. Odisha Government is providing us Panchayat buildings for free of cost. Reaching to the untapped areas has been a conscious effort on the part of the bank and we have even included Jammu and Kashmir in our progress trajectory. For J&K we have a special project known as UDAAN. Under this plan, we have given employment to about 300 people who are now working across India. Our chairman’s vision is also to have a circle office in Kashmir. In my opinion banks have clearly understood and seen opportunities of business in the rural areas.

“We have sanctioned about `67 crores for financial year 2013-2014 for CSR activities. One of the major projects being taken up is the defluoridation plants in about 250 villages at the cost of `20 crores”

How are you providing financial knowledge to the rural people?
We have financial literacy centre and a separate trust for financial literacy. This is what only Canara Bank is doing. It runs about 60 financial literacy centers named as Amulya and retired bank employees are associated as counselors with these centers. We have provided them with a vehicle called Canara Gramin Vikas Vahini vehicle who give information via pamphlets and other information regarding banking and loans. Therefore the demand for credit has been raised. These financial counselors give knowledge about utilization of credit.

Please elaborate on the Corporate Social Responsibility (CSR) initiatives of the Canara Bank.
We have sanctioned about `67 crores for financial year 2013-2014 for CSR activities. One of the major projects being taken up is the de-fluoridation plants in about 250 villages at the cost of `20 crores. Some other programs are of skill development and capacity building. We have 63 such training institutes. We have one trust for helping persons in the unorganized sector; this is called the Swawablamban program being spearheaded by our in-house NGO, Canara Bank Rural Centenary Development Trust where the officials are trustees and separate officers are there to manage the working. More than anything else, skill up gradation, capacity building, employment generation and engaging rural women and youth are the focus of our activities.

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