Indian Institute of Banking and Finance 2

Indian Institute of Banking and Financethat exists between current bank models and the needsof the ordinary, rural Indian. Our Aadhaar team, on ruralvisits, found that many Indians viewed banking as an alien,difficult experience. Even when they had accounts, theyrarely used them. The bank was usually far away, requiringtravel in a bus and the foregoing of a day's income ifthe person was a daily wage earner. There was little theperson could do if they needed money immediately, in caseof a financial emergency.And once there, the bank required the often illiteratecustomer to fill a bewildering number of forms, and alsorequired documentation that the person did not have.Clearly a banking model which has been tailored forthe educated and urban population is now trying tocater to the needs of our vast rural country. In thissetting, it quickly reveals its weaknesses. The average bankdeposit in rural India is one-tenth that of urban India.When catering to the poor individual, the bank facesa customer who prefers to make numerous, very smalltransactions, which vastly increases costs for the bank,with little additional benefit in deposit value. The resultis that banks don't treat poor, rural market as a priority –every additional customer becomes a source of additionalexpense rather than profit.Reworking our approachesD. Subbarao, the RBI governor, has pointed out the needfor us to build additional bridges between the ordinary villagerand the banks as they now exist. There have some interesting12