Using Technology to transform Challenges to Opportunities

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1 Using Technology to transform Challenges to Opportunities the case of Thenhipalam Co-operative Rural Bank Sreejith Mullasseri Asst Secretary, Thenhipalam Co-operative Rural Bank Ltd, Malappuram Dist. Kerala State Manikumar S Deputy General Manager & Member of Faculty Bankers Institute of Rural Development, Lucknow

2 An Introduction To TCRB Thenhipalam Cooperative Rural Bank (TCRB) was registered as a Primary Agriculture Credit Society in 2002, under the Kerala Co-operative Societies Act, 1969 Operational area covers three Panchayaths: Thenhipalam, Peruvallur and AR Nagar under the Thiroorangadi Taluk of Malappuram District TCRB had started its journey on 16 th August 2002 with 100 members and a share capital of Rs.75,000/- The HO and sole branch office of TCRB is at Kohinoor.

3 Today TCRB is profit making Bank continuing its journey with members and deposit account The deposit accounts aggregates Rs. 50 crore [of which, CASA constitutes 18% share] Particulars Share Capital 2017 Nov Growth vis-à-vis 2010 CAGR % [2010] x 81 Deposits , , , , , , x 59 Loans , , , , , , x 64 Total Business , , , , , , , x 61 Profit Rs. Lakh No. of depositors Business Growth YoY % 2,519 7,581 14,930 20,364 23,948 27,931 33,142 42,355 43,041 17x

4 The journey of TCRB from then to now was not a cake walk But they have the courage to fight, have the willpower, teamwork and the motto to win and prove themselves Through this willpower, teamwork and hard work they came out successful.

5 Background TCRB had never reported profit, since its inception, till In 2010, the new Management Committee took charge. The Bank, then had only 3 permanent employees and a need was felt to bring in more professionalism in the functioning of the Bank.

6 Since TCRB faced liquidity crunch, the Bank approached Malappuram District Cooperative Bank for financial support, without success The new management then met the then District Development Manager (DDM) of NABARD, Shri. KP Padmakumar, to seek a financial assistance of Rs.10 lakhs for the Bank. But the DDM of NABARD did not give them any funds, nor did he promise any. He gave them an idea instead: Why not set up a Farmers Club?? Why not set up a Farmer s Club????

7 The DDM convinced the Bank team that their priority should be to find ways to increase the business volumes by widening and deepening the Bank s presence, and forming a FC could be the first step. The DDM also offered to sponsor the setting up of the new FC under the Farmers Club Programme [FCP] of NABARD. Thus the BC concept got its birth and the history begins there..

8 Financial Inclusion through Farmers Club a novel initiative In Dec 2010, the Green Earth Farmers Club [GEFC] was set up by the TCRB, with 15 progressive farmers as members DDM of NABARD played a vital role GEFC conducted various programs like farmers camps, awareness classes, lectures by agricultural experts, etc. Gained much publicity and acceptance through social media, enhanced the reach and visibility of both TCRB and GEFC In April 2011, GEFC was made a BC of TCRB Today, GEFC boasts of a membership of 123, of which 90 members are also working as BC Agents of GEFC.

9 Green Earth Farmers Club at a glance!! GEFC is running GSETI (self employment training Institute) GEFC is having Four divisions Business correspondent Agriculture Division Non Farm Division GSETI Direct income for 130+ rural, poor families GEFC won 2 nd Best Farmers Club award in Kerala for from NABARD Best Farmer s Club state award for Professionally Managed FC Five Offices at various places of Thiroorangadi Taluk

10 Technology adoption the key to transformation 2010 TBA Installed 2012 CBS Implemented for a Single Branch Bank IT Support at Bank ATM, Micro ATM introduced BC software Agent Banking KIT App For Employees: Orbit Lite Hand shake with digital world. Feel the changes Make history.

11 Co-operative Financial Inclusion- Re-christened FI approach The process of providing financial products and services needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost in a fair and transparent manner by cooperative sector.

12 Co-operative Financial Inclusion Why Inclusion required in Cooperative Sector? Low active membership [viz., lesser transactions] Aging profile of existing customers New Gen customers reluctant to deal with co-operative banks Limited Technology used / Limitations in technology used Low levels of customer service Limitation of Employees in acquiring IT-based technical skills Traditional work processes, not appealing to customers.

13 Challenges facing by Cooperative Banks Commercial banks are starting more rural branches/usbs NBFC s opening new branches even in small areas Cannot compete with commercial/new generation banks Non availability of Internet banking, SMS Banking, ATM services Political considerations affecting functioning of Co-operative Banks NBFCs are acting as Business correspondent of Commercial Banks Citizen Service Centres started to act as the BCs of Federal Bank.

14 Survey Results [Age group : 25-35] Sample size: 223 Co-operative Financial Inclusion 91 % are unaware about all banking facilities of a Coop Bank 93 % are depending on Commercial banks especially on New Gen Banks for their personal Loans 96 % preferring NBFCs for Gold Loans 97 % are seriously concerned about safety and security of a Co-op Bank 95 % seriously concerned about the technologies used in Co-op Banks.

15 No ATM NO Internet Banking NO Mob Banking Then why should I??????

16 GEFC AS BUSINESS CORRESPONDENT TCRB appointed GEFC as its Business Correspondent in April 2011 GEFC initially recruited 5 BC Agents whose job was to provide doorstep banking This resulted in BCAs opening a lot of new bank accounts on behalf of TCRB, thereby widening its customer-base Initially, operations done manually: cash was collected against paper receipts and deposited with TCRB by the BCAs. Later it transformed completely to digital mode.

17 BCAs at field

18 Services provided by TCRB through BC Zero Balance SB account Micro Savings Scheme Recurring Deposit Loan & Loan repayment Pigmy Deposit Group Deposit Scheme Utility Bills like KSEB bill,bsnl bill Prepaid Recharge Facility for Phone and DTH Cash credit of Rs.5000 to Women (Rural Mahila Credit Card)

19 BC NETWORK From 5 BCA to 130+ BCAs Earning varies from Rs.2000 to Rs / month for each BCA Women empowerment through BC activities 55% of the total business is from BC model

20 Customer Service Points CSPs are run by Farmers Club It act as Branch of TCRB Located at the remote areas where no banking service is available All transactions are routed through OTP or PIN based magnetic cards Low operational cost (avg.rs.20000/ month)

21 CSP Then Now

22 Demonetization TCRB could overcome the currency crunch through BC model BCA played vital role post-demonetization PACS allowed to withdraw only Rs.24,000/week BCAs collected Rs.25 lakh in the first week itself We are the only PACS in the State that could manage the situation well NEFT/RTGS facility helped to overcome this situation.

23 COOPaisa COOPaisa is an innovative no-cash no-card payment solution that allows public to pay for their daily needs, whether it is groceries or travel by auto-rickshaws, using their mobile phones TCRB introduced digital payment solution first time in cooperative sector.

24 Payments through QR code It works on Smartphone with internet Smartphone without internet Normal phone [with OTP] Security Stds : OWASP 3.0 SSL certified domains

25 Platinum Credit Card Virtual credit card for mobile app customers Credit limit of Rs.5000/ month Targeting to digitalize the traditional Dept Book with kirana shop.

26 Cozy Cash- Rural Bank Cash Points TCRB again contributed new concept in Indian Banking Industry Introducing new banking model!!! Now onwards No Branch No ATM No POS No Micro ATM Banking Everywhere. Customer can either Deposit or withdraw money from any merchant in this area. Please deposit Rs. 5,000 to my SB A/c. No. 5079

27 IT Products BEACONPRO BEACON ORBIT MyBank COOPaisa Orbitlite Online banking Agent Collection KIT Shoppe_ Merchant s App ATM Micro ATM H2H service GL mitra Software SMS Alert Misscall alert essl Cash Points Platinum Credit Account DDFS

28 Accolades FCBA 2017 Best BC Performance FCBI Awards [Banking Frontiers] 2016 Best in IT Best Youth Customer Engagement Best Green Initiative FCBI Awards [Banking Frontiers] 2015 Best CEO Best Bank for Payment Solutions Best Bank in Deposit Growth NABARD Awards Best Performing PACS in SHG-BLP in Kerala State: Karshaka Mitram Awards

29 Conclusion TCRB recorded 1435% growth in business within 6 years On an average, 55% of the business of TCRB is routed through BC We have proved that Technology can transform challenges to opportunities

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