How about asking borrowers to pass an exam before the bank sanctions them a loan? Bandhan Bank, which got its licence as a commercial bank six years ago, is doing exactly that. Being at the forefront of digital inclusion in remote areas — with most customers coming from the rural markets – handholding customers to the digital ways is core to the digital banking at Bandhan Bank.
Speaking at the bank’s sixth-year anniversary celebration, the MD and CEO Chandra Shekhar Ghosh said when they acquire new customers, they educate them for about two weeks on digital banking. “We explain to them to make digital transactions and help them understand the concept of credit discipline and credit requirements. When they approach us for loans, we educate them, followed by an exam. We reject the loan application if they flunk. This is how we take a call on credit assessment. It puts pressure on them to understand how banking is done,” he said.
Digital transformation is indeed needed, but when it comes to digital inclusion in rural India, the human touch cannot be replaced. Ghosh makes sure to speak to customers in town hall meetings or otherwise to understand their concerns. “When I figured that the borrowers in the micro-credit segment did not repay us loan during Covid-19 simply because they were not aware of phone banking, I made sure they are being educated about mobile banking to repay us the loan,” Ghosh said.
Further, he has entered into partnerships to work on data analytics to understand the different needs of a customer. “Our micro-credit borrowers were approaching other lenders for a home loan or two-wheeler or four-wheeler loan. Now we are setting up data analytics to understand their demand. It is helping us diversify the business from the same customer,” he said.
Arundhati Bhattacharya, chairperson & CEO, Salesforce India and former chairperson, SBI echoed Ghosh’s views in a fireside chat with him. “While we are doing digital transformation, we must not forget the human element. Money is something where people still wish to have some physical presence unless one has enough risk appetite. In India, we don’t have it largely,” she said.
As a chairperson at SBI a few years ago, Bhattacharya tried to communicate the meaning of digital banking to the staff and customers alike. “Mobile and net-banking is not digital banking. The meaning of digital was not well understood even by top echelons,” she said.
She created seven state-of-the-art digital branches – called SBI In Touch – in malls with large footfalls. “I wanted my customers and even employees to visit them. These branches would stay open even on weekends. You enter the branch and you would find large screens and smart tables. At least one customer executive will be there to address your queries. Otherwise, customers can themselves make withdrawals and generate loan queries to get in-principal loan approval,” she said.
Although these branches did not make money, she said, it slowly changed the perception of the employees as to what digital means.
She further stressed that financial inclusion is the first step towards creating a far more equal society. “India is a young country. We still have quite a distance to go before demographic advantage deserts us. Within that period in another 20-30 years unless India becomes a developed nation, the chance to become one will pass us by another 80-100 years. We need to ensure our society becomes an inclusively developed one,” she said.