Indian Bank to set up 500 kiosks for Rs 7.5 crore

Indian Bank is tapping alternative methods to penetrate the rural segments. The bank plans to set up 500 kiosks in the rural areas by the end of the current financial year.

"We have set up a kiosk in the Ariyur branch in Puduchery on a pilot basis. We are planning to set up 500 kiosks across the country by the end of this year on an investment of around Rs 7.5 crore. The kiosks will enable the rural populace to withdraw and deposit money. This will save them time and money spent on travelling to the nearest branch, which is often far away," said M S Sundara Rajan, CMD, Indian Bank.

The bank sees huge potential in the rural areas to boost business, besides fulfilling the Reserve Bank of India's (RBI) mandate of lending 18 per cent of its net adjusted bank credit to agriculture.

The kiosks will also rope in local business facilitators to help them mobilising more funds and get a larger percentage of the rural population into the banking fold. The bank also intends to provide value-added services such as informing rural customers about weather forecasts, board examination results and market conditions of various commodities, said Rajan.

When asked if the kiosks could be upgraded to grant loans, Sundara Rajan said it "may happen eventually". For now, kiosks functionality will be limited to loan disbursals, cash withdrawals and depositing of money. The bank has filed a proposal of setting up 500 kiosks with the RBI and is awaiting for its approval.

The bank disbursed Rs 2,984 crore and Rs 3,974 crore in the rural and semi-urban areas, respectively, in 2006-07. It has set an internal target of Rs 5,000 crore for the rural segment and Rs 5,150 crore for the semi-urban segment for the financial year 2008. The bank mopped up deposits worth Rs 4,347 crore and Rs 8,280 crore from the rural and semi-urban areas, respectively, in the financial year 2007, while deposit mobilisation target for the 2007-08 is Rs 6,000-8,000 crore from the rural areas and Rs 10,000 crore from the semi-urban areas.

Rural areas are regions with a population of around 10,000 people, while semi-urban areas have populations of around two lakh. Interestingly, as on March 31, 2007, the bank operated 469 branches (32.54 per cent) in the rural areas and 365 branches (25.32 per cent) in the semi-urban segments, while the urban and metropolitan areas had 350 branches (24.29 per cent) and 257 branches (17.83 per cent), respectively.