Banking in Rural India - Best Thought from K.V.Kamat - CEO of ICICI Bank

rural india remains largely unbanked even today. financial inclusion and similar high sounding initiatives havent made a dent yet. probably because bankers have no understanding of the needs of rural india. it is definitely not high tech banking that villagers are looking for. they arent looking for a place to deposit their surplus cash either. as they have no cash .  they arent fascinated by any time money ( ATM ) machines too. what they want is loan to run their  farms . they are definitely not comfortable with paper work and the delay. rural folk are no cheats. if they make money they will definitely repay the loan. if they lose money the loan is stuck. no choice there. so what the banks should do in rural areas is (1) lend money . know the customer and  just lend . keep the procedure simple.(2) put an insurance in place . if the farmer lose money for genuine reasons waive the debt. in short banks should imitate the local money lender if it is to take root in the rural areas. 

Hi Sajan, Thanks for sharing the bitter side of good Institute as ICICI. I only hope that top managment also would have heard such things and may come up with plan of action to curb it.

It is likely that the recovery culture unleashed on Indian banking by ICICI might lead to more rural suicides, if the Bank goes rural. Hopefully, villagers might resist it with lynchings. As for the quality of ICICI employees, ICICI recently filed a case against an HDFC Bank recruiter for saying that her primary rule for recruitment is that the applicant should have no previous ICICI exposure. ICICI is responsible for goonda-isation of Indian banking, if we are to go by the various High Court and Supreme court comments.

Very Good One.

Good Article, its true that ICICI employees are one of the best employees available in the financial market.

Good article, going to rural will definately put ICICI in top 25 league of banking giants

Dear Hitesh, 
Well said!! You are right we should make another Grameen happen. Good comments. You seem to have some good ideas on this topic. Looking forward to other interesting analysis from you. Keep it up.

Regards
Syam

Yes Shyam, You are right. 
Actually, I admire FINO initiative of IBM + i-flex and ICICI bank. It is one step towards low cost technology plateform to all the MFIs.
Problem is Non Banking footprint being too large against the banking one. Every single Rupee coming into Bankable umbrella increase chance of better fiscal condition.

I think once giants like SBI,BOB etc.. will start using their rural network, they will bring another wave of innovation. 

Let another Grameen happen. Pepole like you and me are small part of big picture helping it happen one day.

Regards,
Hitesh

Hitesh, good article. As pointed out by Kamath, distributing banking products to rural areas is biggest challenge for most banks across developing world. I believe the next round of business model and technology innovation will come from trying to distribute banking products to rural areas cost effectively. And these innovations can replicated across the developing world. Something like Grameen bank did with micro-finance or Tata did with Nano. Whats your thoughts on that?