Jammu and Kashmir Bank has got a big boost after the Reserve Bank of India gave permission to utilise common service centres, known as Khidmat Centres, as business correspondents across the state.
The bank received a communique from the RBI in this regard a few days back, a spokesman of the bank said.
"It is an alternative delivery mechanism for financial services which leverages the strength of the existing formal financial channels, even as it retains the reach and method of informal finance," JKB Chairman and Chief Executive Officer Haseeb A Drabu said.
Under the business correspondent model, all basic banking services offered by JKB would be available to its customers at Khidmat (service) Centres. The move will enable JKB to add 1,100 more branches to its existing network of almost 600 business units around the country.
The Khidmat Centres -- 300 of which have already been established -- would be set up exclusively in J&K, particularly in remote areas. This would scale up efforts for financial inclusion, JKB said.
These Khidmat Centres shall become viable agencies for public empowerment at the grassroot level, Drabu said. They would help the bank deliver core banking services to the people at their doorstep, while bringing more public spaces within the fold of formal financial channels.
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These centres also create employment at the grassroot level, he added.
Drabu said that given the intent of the central government to merge and implement all the rural development schemes through these common service centres, their number is expected to swell to 4,300 by 2013.