What will the new face of banking look like

Mumbai: Local agents are trumping the utility of bank branches since the outbreak of the pandemic with universal banks, payment banks and payment operators onboarding more than double the number of business correspondents they did before Covid-19.While most banks have gone slow or halted adding new branches, the largest lender SBI is expected to hire more than 11,000 such business correspondents this year.While there are more than 1 lakh branches, more than half are concentrated in urban centres, restricting banking access for the under-served.“Banking has gone out of the branches, it’s becoming a more physical plus digital model. In line with that, we are expanding the number of customer service points to 75,000 by March-end from 64,000 presently,” a senior SBI official said.Besides large banks, remittance companies and payments banks have contributed to the exponential rise of alternative banking channels.Fino Payments Bank is adding 14,000 such merchant and banking outlets in a month from 8,000 a year ago. “The consumer is seeking convenience hence non-branch models are rising. The most popular format is individual merchants which could be your mom and pop stores, chemist, grocery shops where we are seeing customers come in to do basic banking services,” said CEO Rishi Gupta.Anand Kumar Bajaj, CEO of leading AePS facilitator PayNearby, said customers were not travelling long distances to avail bank services and were seeking local options.Seema Prem, the CEO of FIA Technology, another leading financial services firm operating predominantly from rural and semi-urban zones of the country, said that the demand for such ‘Bank Mitra’ agents has been “significant” since the lockdown. “One of the reasons is the classification of this sector as an essential service which protected the livelihood and ensured that the wages didn’t fall,” said Prem. “Another reason is sustained appreciation by the Finance Minister and the Prime Minister of these services which prompted the states to take this very seriously.”Several states such as Uttar Pradesh and Maharashtra under its livelihood missions ensured that every district had at least one or more Bank Mitras serving customers of multiple banks.According to industry experts, there are over 1.1 million business correspondents employed by banks and corporate agents. BCs are broadly classified as public sector bank mitras and retail business correspondents.Additionally, India Post Payments Bank (IPPB) too employs 1.8 lakh postmen and Grameen Dak Sevaks to provide basic banking services.

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