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ShareMumbai: Corporation Bank has drawn up a plan to reach out to 2,000 villages by March 31, 2010 through its branchless banking channel.
"We will provide facilities to 2,000 villages by March 31, 2010, of which 1,000 will be done by the end of 2009," J M Garg, chairman and managing director, Corporation Bank said. The bank plans to do this through its newly launched mobile banking initiative called 'Green' in association with Tata Indicom, mobile-payments provider Paymate and Amalgamated PCOs India Trust (APIT).
The bank presently has a network of 210 branches that reach out to 571 villages.
Under 'Green', a person wanting to remit money can go to Tata Indicom PCO or True Value Shopee, where the APIT member would help the person open a no-frills account with Corporation Bank.
After opening the account, the person can send money via an SMS to his family in another location. The family would receive a message containing the details of the payment, which can be collected via the Tata Indicom PCO in that location.
APIT has a network of 70 lakh PCOs in 6 lakh locations, managing trustee Rajnish Ranjan said. Money transfer services will be done at a nominal cost.
"We will be charging 5% of the transaction value, similar to what the postal services charge," said Ajay Adiseshann, founder and managing director of Paymate.
Corporation Bank also plans to offer other facilities to people opting for the remittance service through Green.
"We would also lend money within six months. Once they open a no-frills account they will be able to draw a loan of Rs 200-2,000, depending on the size of the village," Garg said.
Explaining the motive behind the move, he said, "We have 5 lakh no-frills accounts, of which 20,000 account holders have taken a loan. There is a total deposit of Rs 20 crore in these no-frills accounts. Our credit-deposit ratio for these accounts is more than 100%.We are giving them 3.5% as interest for savings bank accounts and lending at 9%.
Asked whether know-your-customer norms would be a hindrance for the migrants opting for remittance, Garg said, "For a no-frills account only a self declaration from the person is needed."
