This August 17, which was the auspicious day of Chingam 1, and the start of the year according to the Malayalam calendar, Federal Bank wheeled out an innovative ‘Bank on the Go’ pilot project in Madurai. “The idea is that instead of you going to the branch, it will come to you,” Shyam Srinivasan, the suave MD and CEO of the Kerala-headquarted bank, told BusinessLine, adding that the aim is to take banking services to underbanked rural areas.
While in Madurai region Federal Bank’s van, wearing the brand’s bright blue and yellow colours jauntily, is already doing trial runs, reaching out to unbanked customers at their doorsteps, the pilot is also being launched in Uttar Pradesh Capital Lucknow.
Interestingly, a day later, on August 18, in Palghar, a town in Konkan division of Maharashtra, HDFC Bank unveiled a Bank on Wheels concept as part of its rural banking business. In September, HDFC started trialling the mobile bank in Ankleshwar, Gujarat as well.
Both Federal Bank and HDFC said the innovative pilots are in line with the government’s financial inclusion goals. The model in both the banks’ projects is that the vans will cover specific locations on different days of the week.
According to the Federal Bank, each van would have a security personnel, besides the support staff. It would offer a host of services including opening new savings accounts, cheque book requests, fund transfers, as well as handle customer grievances. HDFC too is offering 21 services through its van bank.
A recent World Bank report on Financial Inclusion, Digital Payments and Resilience during Covid-19 had flagged that India was among seven countries that housed half the world’s 1.4 billion adults without access to formal banking. It had pointed out that distance was a big barrier for 31 per cent of unbanked adults.
By wheeling in these mobile banks, the two banks are breaking through some of the barriers that prevent people from accessing formal banking.