News: ICICI Bank going rural
(ACERC 02/05/2006) Mumbai - ICICI Bank wants to paint India's rural landscape maroon. It is through a no white spaces strategy, ensuring an ICICI Bank touch point within 5-10 km from customers in hinterland.
Each touch point will be a full-service banking centre, offering services ranging from routine banking transactions to trading in shares and commodities, availing of loans and buying life and general insurance policies - the services urban customers enjoy at bank branches.
The touch points will not be just referral points. A person entering a touch point will come out having availed of all the services he wants. The touch points will be managed and operated by local entrepreneurs, be it pharmacists or tractor dealers. These local entrepreneurs personally know and understand the credit-worthiness of prospective customers.
ICICI Bank plans to cover 400,000 of over 600,000 Indian villages through its hub and spoke hybrid channel architecture. The bank has already implemented 50 per cent of the strategy in over 50 districts in Maharashtra, Gujarat, Uttar Pradesh and south India.
The touch points strategy eliminates fixed costs involved in maintaining own branches and the recurring costs are only a fraction of the fixed costs entailed in having branch presence. Also ICICI Bank cannot have branches in all the 400,000 villages where its wants to do business. The branches would be more of processing centres for the respective districts.
The district branches will act as credit and processing hubs for the business generated in the respective clusters. The non-branch channels will include credit franchisees, a network of originator franchisees, rural internet kiosks, a network of micro-finance institutions and non-government organisations (NGOs) and technology-based initiatives like biometric (fingerprint) enabled ATMs. The credit franchisees will also be sharing the business risk with the bank.
Each touch point will be a full-service banking centre, offering services ranging from routine banking transactions to trading in shares and commodities, availing of loans and buying life and general insurance policies - the services urban customers enjoy at bank branches.
The touch points will not be just referral points. A person entering a touch point will come out having availed of all the services he wants. The touch points will be managed and operated by local entrepreneurs, be it pharmacists or tractor dealers. These local entrepreneurs personally know and understand the credit-worthiness of prospective customers.
ICICI Bank plans to cover 400,000 of over 600,000 Indian villages through its hub and spoke hybrid channel architecture. The bank has already implemented 50 per cent of the strategy in over 50 districts in Maharashtra, Gujarat, Uttar Pradesh and south India.
The touch points strategy eliminates fixed costs involved in maintaining own branches and the recurring costs are only a fraction of the fixed costs entailed in having branch presence. Also ICICI Bank cannot have branches in all the 400,000 villages where its wants to do business. The branches would be more of processing centres for the respective districts.
The district branches will act as credit and processing hubs for the business generated in the respective clusters. The non-branch channels will include credit franchisees, a network of originator franchisees, rural internet kiosks, a network of micro-finance institutions and non-government organisations (NGOs) and technology-based initiatives like biometric (fingerprint) enabled ATMs. The credit franchisees will also be sharing the business risk with the bank.
posted by InCar Group Press Room at 19:49
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