Nabard is proposing to set up a common Shared Services Entity across the country for all rural cooperatives, its Chairman K V Shaji said on Tuesday.
“Both government and the RBI have agreed in principle for this entity. We, jointly with Central government and cooperative banks, will set up a separate company for digital adoption,” Shaji said at CII Fintech and Financial Inclusion Summit in the capital.
This entity will also require collaborating with fintech firms, thereby presenting ample opportunities for the latter to partner with both RRBs and cooperative banks.
As smaller entities, most cooperative banks are currently not able to invest in technology, he noted.
‘Focus on cooperatives, RRBs’
Shaji said that fintechs must look to enhance their focus on the cooperatives sector and regional rural banks (RRBs), noting that both are engaging with technology in a larger way.
There will be ample room for the fintechs to devise tech solutions, work on the digitised database and platforms in these two areas, Shaji said.
“We are, on behalf of the Central government, undertaking digitisation of cooperatives. By March 2025, it will happen and we will invite fintechs to work on that. We need a lot of technology solutions to work on these digitised database that we will have besides looking at transaction trails of digital platform,” Shaji said.
He suggested that fintechs should devise tech solutions to vend government schemes in a better way. “Fintechs must look at the recent government schemes like PM Vishwakarma scheme and credit guarantee scheme, insurance and pension schemes and (find out) how they can make it easier to vend such products,” he said.
Noting that fintechs may not may not secure much margin in such endeavours, Shaji exhorted them to look at the impact it would create. “You can have cost plus approach. Development finance institutions can support this initiative”
One State, One RRB
Shaji further said the RRB sector is the middle layer of the banking system in the country, which is engaging with technology in a larger way on account of the intervention of the Department of Financial Services (DFS) in the Finance Ministry.
Now, consolidation of RRBs is also being agreed on in-principle by the Finance Ministry and this could lead to a situation of ‘One State One RRB’, he added.
“With Nabard being the institutional developer for RRBs, we are now giving technology solutions on a common platform. We are working with DFS, Sponsor Banks, RRBs similar to cooperatives sector,” he said.
In the cooperative sector, currently, around 7.5 crore people from rural areas are not dealing in the digital space, Shaji said.