This Bankpreneur Is Empowering Rural India With ‘bank-in-a-box’ Essay
Starting with a predominant share of corporate banking business, IDFC Bank received a universal banking licence from the Reserve Bank of India (RBI) in July 2015 and started its operations on October 1, 2015. Being a startup in itself, the Bank expects to grow the business of its initiative Bharat banking, a rural banking unit, to Rs 15,000 crore in five years.
In a bid to instil entrepreneurial qualities among the youth, the Bank has started various programmes for startups. Entrepreneur India caught up with the founder and CEO of IDFC Bank, Dr. Rajiv Lall, to know more about their initiatives to promote the startup culture in India.
What are you doing for startups?
IDFC Bank offers technology-enabled integrated solutions that are customized to the business requirements of startups. The Bank is determined to democratize solutions that were hitherto the reserve of only large corporates. In order to achieve this, the Bank has introduced solutions that recognize the needs of a customer both as an individual as well as a businessman.
The launch of ‘Truly One Account’ – the first-ever intelligent account that rolls an individual’s savings account and current account into one is one of IDFC Bank’s key initiatives.
Truly One Account will mean ‘one view’ and ‘sweep’ facility from one account to another. By the use of this account, an individual can not only view both accounts on the same screen, but also switch between them, track and transfer funds easily.
The Bank also offers a World Business account, which enables a customer to manage domestic and international business with just one account. Another unique feature of the Bank’s offering is doorstep banking. For startups, which are low on manpower, doorstep banking, in the areas of cash management, is an added convenience.
The Bank has also launched merchant solutions which support all payment methods – physical POS, m-POS, e-commerce (payment gateway) and UPI. The Bank is focussing on entrepreneurs, uncarded merchants and professionals – which is an untapped segment.
The Bank offers one RM for a 360-degree view and servicing of its customers in the self-employed and startup segment.
How bank is contributing in bridging the gap between Bharat and India?
IDFC Bank is contributing in bridging the gap between Bharat and India by digitizing banking in rural India. The Bank is investing in last mile infrastructure by installing micro ATMs in deeper rural and far-flung locations, which have been so far excluded from the formal banking fold. The Bank’s first-of-its-kind microATM is introducing users to the concept of ‘assisted digital’. This is making banking not only ubiquitous but is revolutionizing the way people transact.
The digital agenda is embedded in the DNA of IDFC Bank. As a technology-intensive Bank, a unique suite of banking solutions has been built to bring simplicity and convenience to small businesses and entrepreneurs using the digital platform. The Bank is taking these solutions to tier 2-6 cities.
What is ‘Bank-in-a-Box’?
The micro-ATM used in semi-urban and rural India operates like a ‘Bank-in-a-Box’. It consists of a tab, biometric scanner and a thermal printer. It is android and tab-based, apps are faster, and is user-friendly. So it is actually extending ‘tab banking’ not to the metros, but beyond it to the urban and rural locations of the country. This ‘Bank-in-a-Box’ is capable of Account Opening (in 4 minutes, e-KYC, paperless), Account Servicing (deposit, withdraw cash, balance enquiry, fund transfer, remittances, mini-statement etc) and Acceptance Infrastructure (government payments including pensions, scholarships etc).
How are you contributing to Narendra Modi’s Make in India and Digital India drives?
Lending to the self-employed, micro enterprises and small businesses is an area of focus for IDFC Bank. This is a segment with a huge potential and is currently underserved by the banking sector. Ironically, this is also a segment that will contribute substantially to the Make in India movement. By supporting the business and financial requirements of this segment, the Bank is contributing to it in a big way. As a bank with a public purpose, IDFC Bank is also reaching out to the underserved segments of Bharat, especially the self-employed and micro enterprises in parts of rural India.
Plans you have set for the next financial year?
The Bank’s plans to extend newer offerings to businesses and entrepreneurs revolve around their growing needs. That was the basis for the Bank’s proposition when it started serving its customers a year ago. It identified the pain points of the customer, and devised solutions to solve these – albeit in a digital way. Our contact centre is manned by experienced bankers, not an IVR. The key word here is integration – one account to serve all needs of the entrepreneur or a small business.
Do you think FinTech will disrupt banking?
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The Indian consumer is aspiring for superior service and digital disruption is threatening the traditional banking model. The fundamental way of using technology is changing and the speed of adoption is incredible. With changes in infrastructure, regulation and technology, we believe that the cost of delivering banking services have come down dramatically. This is the WhatsApp moment in banking and is equivalent to the prepaid moment for the telecom industry or the sachet moment for shampoos. IDFC Bank’s radical partnerships are hence focused on working with FinTech on both lending and payments space.