This August 17, which is the auspicious day of Chingam 1, and the beginning of the year according to the Malayalam calendar, Federal Bank launched 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,” says Shyam Srinivasan, MD and CEO of the Kerala-headquartered bank. Business Lineadding that the aim is to bring banking services to underbanked rural areas.
While in the Madurai regional Federal Bank van, happily wearing the brand’s bright blue and yellow colors, 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 the Konkan division of Maharashtra, HDFC Bank launched the Bank on Wheels concept as part of its rural banking business. In September, HDFC started trialling mobile banking in Ankleshwar, Gujarat as well.
Both Federal Bank and HDFC said the innovative pilot is in line with the government’s financial inclusion goals. The model in the project of both banks is that the van will cover certain locations on different days of the week.
According to the Federal Bank, each van will have security personnel, in addition to support staff. It will offer a range of services including opening new savings accounts, check book requests, fund transfers, as well as handling customer grievances. HDFC also offers 21 services through its van bank.
A recent World Bank report on Financial Inclusion, Digital Payments and Resilience during Covid-19 has highlighted that India is among the seven countries that are home to half of the world’s 1.4 billion adults without access to formal banking. It has pointed out that distance is a major barrier for the 31 percent of adults who do not have a bank account.
By launching this mobile bank, the two banks are breaking through some of the barriers that prevent people from accessing formal banking.