Spice Global (BK Modi Group) group executive director wants to further the government objective of rural penetration
Technology will be the differentiator for us and we will focus on smart mobile banking. It is the most cost-effective solution. The cost of one physical transaction is Rs 40-60, and through a mobile is Rs 1-1.5. An ATM transaction costs Rs 15-20. Of our six lakh villages, only 5 percent are covered by commercial bank branches. Forty-six per cent of the population is still unbanked. At the same time, almost everyone has mobile phones. They access the internet through the mobile phone.
The whole objective of the government is rural penetration for financial inclusion. We will have the physical reach and set up 25 percent of our branches in rural areas, but there is no way to reach the population but by mobile banking. We can’t just rely on physical branches. We will follow the hub-and-spoke model and will have business correspondents to reach customers. The correspondents will do KYC (know your customer) and cash transactions.
(This story appears in the 09 August, 2013 issue of Forbes India. To visit our Archives, click here.)