Financial inclusion efforts commercially sustainable despite ineffective branch network: BoB

The balances have been going up and to such an extent that quite probably today, even on a standalone basis, the financial inclusion effort of the bank is also commercially sustainable, Chadha said, speaking at an event organised by the Womens World Banking.He credited the BC network for being of immense help in the delivery of banking services and also increasing the customer engagement which yields revenues.

State-owned Bank of Baroda (BoB) on Wednesday said its financial inclusion efforts are probably ''commercially sustainable'' despite having an ineffective branch network which has limitations in improving customer engagements.

The business correspondents (BC), a network of outsourced service providers, is making it possible for the bank to sustain its financial inclusion efforts, BoB's managing director and chief executive Sanjiv Chadha said on Wednesday.

Ever since the push for financial inclusion from the policy front began, bankers have expressed concerns about the commercial sustainability of such a measure. In 2014, a government push helped open over 45 crore basic services accounts across the country in a short period of time.

''Every year, the number of accounts which are inactive (having) zero balance is coming down. The balances have been going up and to such an extent that quite probably today, even on a standalone basis, the financial inclusion effort of the bank is also commercially sustainable,'' Chadha said, speaking at an event organised by the Women's World Banking.

He credited the BC network for being of immense help in the delivery of banking services and also increasing the customer engagement which yields revenues. He cited the experience during the Covid pandemic, saying the BC presence was up at 6 AM while bank's branches struggled with business mandates.

''…When it comes to engagement, our branch network is unfortunately grossly inadequate to really measure up to that challenge. Our branches are too few in terms of how they are organised, how they are staffed. They are not the model instruments of engaging with our Jan Dhan account customers,'' Chadha said.

The BCs have become the centerpiece and the fundamental building block for taking financial inclusion beyond just account opening, he added.

The head of the second largest public sector bank said BCs have doubled to over 36,000 today from the 2019 levels, and added that the bank has plans to further expand the network of outsourced service providers.

The ratio between the number of BCs and branches was 2:1 in 2019, which has grown to 4:1 now and will be 5:1 by the end of the year as the bank onboards more BCs.

Chadha said the bank is adding up to 20 million new customers every year and going beyond the BC network, the effort now is also to directly engage with the customers using the best of the modern technology.

He said half of its customers are women and the direct customer engagement efforts will also focus on women.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)