A quiet revolution in a troubled state

STATE UPDATE/J&K

Narender Kumar exhults in his debit card. "Earlier we had to carry cash while shopping and there always was the risk of losing the money. Even if you forget to withdraw money from your bank, you can at least put petrol in your vehicle and shop a little on your way back home from office."

Plastic money and automated teller machines (ATMs) are old hat in much of India. But it's a novelty to the public in this state.

Private banks such as Bank of Punjab, UTI Bank, HDFC Bank and Corporation Bank have quietly revolutionised banking in J&K. As a result, members of the public are revelling in what the rest of India now takes for granted.

Says the head of a private bank's branch in the state: "I have a customer here at my branch, who has eight ATM-cum-debit cards. He does not know how to operate the machine and is always assisted by the staff. But he shows off the cards that are peeping out of different pockets."

Adds the official: "He like many others here in this city and this state had till now not seen ATMs, debit cards or credit cards and bank officials greeting them with smiles instead of the usual sullen faces at nationalised banks."

The Bank of Punjab opened its first branch in Jammu about two years back.

But debit cards started gaining popularity only two or three months ago after HDFC Bank opened its first branch in Jammu.

Though the UTI Bank opened a branch three months prior to that, the credit for popularising plastic money must largely go to HDFC Bank and Bank of Punjab which, after it started facing competition, started popularising debit cards.

Figures on the number of credit cards or debit cards in the state are not readily available. But it has between 70 and 80 ATMs, 52 of them installed by the Jammu & Kashmir Bank. Jammu city alone has around 18-20 ATMs.

To be sure, the private banks still have only a small presence in the state. All the banks (including cooperative and rural banks) in Jammu and Kashmir together had total deposits of Rs 13,176.89 crore in June 2003.

The private banks are believed to have garnered Rs 70 crore to Rs 80 crore. Of this, Bank of Punjab accounts for Rs 35 crore, HDFC Bank Rs 10 crore and UTI Bank for about Rs 15 crore.

Kapil Trehan, branch manager of HDFC Bank, says that the bank is pleased at its decision to launch services in this part of the country.

"This happiness is derived from the figures and achievements we have made in the short span of three months. It is all because of the difference in attitudes between the nationalised banks and the private banks that we have been able to grow fast." The bank hasn't started offering loans as yet but will soon do so. What is more, it plans on installing more ATMs in the state.

So do the other private banks. P M Sharma, deputy vice president (J&K) at the Bank of Punjab says that the bank is so happy with the rush at its ATM that it has decided to open more of them in Jammu town.

The local business community, predictably, is ecstatic about such developments.

Jammu hotelier and trader Sanjesh Gupta notes that apart from the new instruments that private banks have launched, the nationalised banks will be forced to offer better services in the wake of the competition they now face.

The state-owned banks haven't yet started to feel the heat but are gearing up. At Punjab National Bank, chief manager G.Q. Gupkari says: "We haven't lost clients or deposits as yet but the private banks have had an impact on us."

He says that the staff has become more customer oriented, that the nationalised banks have started offering debit cards and ATM facilities in J&K and started offering insurance products.

But Gupkari argues that private banks can't compete with the nationalised ones because state-owned banks offer social banking, unlike their private sector rivals.

But the last word on that will be said not by bankers at the state's government owned banks but by customers such as Kumar and Gupta.