The financial services secretary recently said the government needs to consider closing down loss-making branches of state-owned banks and insurance companies. The industry should look at redefining what a bank branch can do before considering such hard options. We may shortly see a wider availability of broadband services that can facilitate video-conferencing. A lightly-staffed bank branch can be linked by video-conferencing to the nearest larger branch from where senior employees can provide more complex services for the linked branch cluster.
Banks can also establish point-of-sale terminals or other forms of access and enable debits to customers of other banks. Financial services such as issue of drafts or safe deposit lockers could also be provided by using cards of other banks. This should become viable once the use of the RuPay card catches on.
As the experience with textile and electronic retail markets indicates, business actually improves if competitors share market space. The financial sector customer will also have easier access to all the services he or she needs. Handling operations of customers of other banks will even out the workload and be a source of revenue.
K R Vaikuntam Madurai
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