Clipped from: https://economictimes.indiatimes.com
Financial institutions dominant in the villages have seen queries for opening banking kiosks surge fivefold since the lockdown began. Industry players attributed the requests to reverse migration trends. Enquiries from retail and travel agent shops in rural localities have also seen a marked increase in queries.
MUMBAI: Financial inclusion is increasingly getting a rural flavor – and opening up new business windows even as some others are shuttered. With the hard-hatted workforce leaving congested cities and heading back to their upcountry homes, banking correspondence (BC) is emerging as a lucrative option for many rural traders.
“Earlier, we used to get 300 leads per day to open banking outlets; now we are getting about 800. Basically, these are people who have realised that banking is crisis proof and, especially, the young are opting to open banking kiosks,” said Rishi Gupta, MD, Fino Payments Bank.
Amid the lockdown, more than 10,000 such merchants were on boarded in April. “We expect to add 15,000 merchants in May,” Gupta said.
Industry players attributed the requests to reverse migration trends. Family members returning to the villages from smaller towns and metros with thriving BC networks would be acting as brand ambassadors, triggering interest among rural shop owners seeking newer business opportunities.
“It’s a matter of prestige as well for some people,” said Paynearby CEO Anand Bajaj. “It’s a service to the community and the nation at times of crisis.”
Aadhar enabled Payment Systems (AePS), which is central to the government’s DBT architecture for the distribution of relief funds, was the only payment channel operated by National Payments Corporation of India to record increased volumes in April. A total of 410 million transactions worth Rs 14,708 crore were processed in April – more than twice of the 180 million transactions processed in March.
Enquiries from retail and travel agent shops in rural localities have also seen a marked increase in queries. Some of these have their origins in the status of banking as an essential service.
“Under this banner, shop owners are not asked by local area authorities to shut shops as our services come under essential,” said Amit Nigam, COO, Bankit. Such enquiries “more than doubled in April,” he said.
With AePS transaction volumes surging in April, companies handling existing banking kiosks and channel operators are burdened with the influx of Jhan Dhan account holders anxious to receive their share of DBT relief under various schemes of PM Kisan and PM Garib Kalyan Yojana. The surge in interest to expand the BC infrastructure coincides with the national drive to expand the digital infrastructure.
Paynearby, a leading AePS facilitator, has seen 15.41 lakh applications come in from various retail outlets just in April, Bajaj said.
“In a typical month, these requests would hover between 30,000 and 40,000,” said Bajaj. “This is by far the highest ever registration requests we have received in three years since we have started working on increasing our merchant onboarding.”
Estimates showed there were more than 1.1 million BCs working for leading banks and payment companies. These agents are broadly classified into two categories depending on the services offered – public sector bank mitras and retail business correspondents.
About 40% of the BCs are associated with state-run banks and can provide nearly all basic banking services apart from loan sanctions. The rest are shops that double up as micro ATM and cash transfer points.
A banking agent in a rural or semi urban locality would require a minimum qualification of having a basic certification and cleared matriculation. For a retail banking agent, they should have a permanent establishment under their name.
Ketan Doshi, CEO, Paypoint, said that the requests for application for retail based BC has seen renewed interest on the ground. However, these registration requests may not immediately convert into licence approvals.
“It’s difficult at the moment to get all the registration processes underway as physical verification is also required,” said Doshi.