Corporation Bank plans tech innovation

Cashless transaction in urban areas and branchless banking in rural areas are the future of Indian banking system, feels B Sambamurthy, chairperson and managing director, Corporation Bank.

Speaking at the annual Banking Conclave of the Federation of Indian Chamber of Commerce (Ficci) in Kolkata on Tuesday, he said the bank had a two-pronged strategy for inclusive growth""technical innovation to replace computer-assisted cash transactions by e- mobile technology in urban areas and new business model for rural masses whereby branch less banking would be possible through tie-ups with local 'correspondents'.

The branch less banking initiative had been recently launched in six villages as pilot projects, he said, adding, the aim was to take the project to 100 villages in the next one or two years.

For urban areas the bank planned to introduce e-mobile banking in a big way, possibly through a tie-up with a software company. The pilot project would be initially launched in Delhi.

Sambamurthy said, ATMs were not a long term solution to a cashless banking system as the cost of transaction was very high. However, in case of mobile banking, the cost of transaction could be as low as 40 paise.

"We must go beyond no frill accounts and credit cards for inclusive growth," he said.

In an elaborate session on the Indian banking system, Sambamurthy further said,contrary to popular perception, rural people were technically more advanced than urban masses, as concepts like smart cards were set to revolutionise rural banking.

The bank was also looking for venturing into newer areas like asset management, though a final decision was yet to come, said Sambamurthy.

Also, the bank might raise funds through tier II bonds, but not in the near future. The bank had a headway of raising funds worth Rs 4,000 crore through bonds, he added.