Public sector banks (PSBs) expect the demand for doorstep banking (DSB) transactions to jump about four times to 1.30 crore by FY28 from an estimated 30 lakh in FY24, going by PSB Alliance (PSBA) data.
Over the five-year period from FY24 to FY28, the 12 PSBs, which currently have a pan-India network of about 86,500 branches, are expected to clock cumulative DSB transactions (financial and non-financial) aggregating 4.55 crore.
PSB Alliance Pvt. Ltd. (PSBA) is an umbrella organisation for all PSBs, primarily focussing on delivering financial and non-financial banking services at customers’ doorstep. It launched DSB services in September 2020.
The Alliance has approved two corporate business correspondents -- Integra Micro Systems (which will also provide a DSB technology solution) and BLS International Services -- to provide DSB services to PSBs via feet-on-street (FOS) agents at over 6,800 centres across the country.
This move is significant as it could lend weight to the Indian Banks’ Association’s recommendation to the Government to declare all Saturdays as holidays under the Negotiable Instruments Act. FOS agents provide DSB services on all days of the week, including Bank holidays. Currently, besides Sundays and local holidays, Banks are closed on 2nd and 4th Saturdays.
FOS agents provide DSB services such as pick up of cheques/ drafts/ payorders, collection of online Life Certificate using Jeevan Pramaan App; delivery of account statement, non-personalised chequebook/ draft/ payorder, term deposit receipt, pre-paid instrument/ gift card; and cash withdrawal (minimum Rs. 1,000 and maximum Rs 10,000) via microATM.
The total IT cost for providing DSB services to the PSBs for five years (FY24 to FY28) is estimated at Rs 49.50 crore. This will be apportioned among the 12 banks as per their size and the number of transactions they generate.
The average FOS costs across regions (North, East & North-East, West, South and Central) and categories (metro, urban, semi-urban and rural) is about ₹45 per transaction. PSBA proposes charging ₹5 per transaction over and above the service cost it will pay the vendors. Besides, the company will get an annual reimbursement of a subscription of ₹20 lakh from each Bank for delivery of DSB services. The revenue from customers is pegged at ₹75 per per transaction.