SBI takes branch banking to a new level - kirana shops

Count your cash, the bank is coming to you — to the neighbourhood kirana store.

State Bank of India (SBI), India’s biggest lender, has started offering banking services through kiosks set up at kirana stores where you can open an account, deposit cash, withdraw or transfer money, and get a ‘pakka’ receipt for it.

SBI is doing this through an alliance with Oxigen, a bill-payment, mobile recharge and ticketing systems provider.

The bank opened the first 50 kiosks in Mumbai, including one in Dharavi and will be rolling out 1,000 more in the city and another 870 across the state.

In Delhi too, 30 such kiosks have been opened. Kiosks in Bihar and UP are planned to be operational by October 2010, said sources.

Other banks are yet to respond to this but experts said they will sooner than later.

The SBI kiosk will facilitate banking services through six languages.

A person who walks into select kirana stores with a photo ID and address proof can open a no-frills account, where minimum balance is not mandatory. The shopkeeper will capture a photo the person using a webcam and also fingerprints with a biometric device.

“The know-your-customer verification process is diluted here; the regular KYC is so stringent that daily wage earners and migrants get excluded from banking facilities,” said Pramod Saxena, managing director and chairman at Oxigen.

So, if you do not have an address proof such as a letter from the mukhiya of your native place or your employer, just stating your place of stay can serve as address proof. There is no personal verification done as in the case of a regular bank account and your fingerprints serve as the main identification.

Opening an account that costs Rs400 at a regular SBI bank branch will cost as low as Rs 20 through these kiosks.

One can deposit cash or withdraw through these kiosks up to a limit of Rs 10,000 per day, while the total balance in any account can’t cross Rs 50,000 at any given point.

Cash deposit anywhere is free, but withdrawal at kiosks other than one where you opened your account is charged Rs 25 per transaction.

You can transfer money from your kirana account to your regular SBI account, but you can’t access the kirana account through a bank branch.

Neither can those who have a regular savings account access banking through kirana stores - for now.

At a later stage there will be micro loans, insurance and remittance offered to these account holders.

“Through the Dharavi microfinance branch we will be financing Rs50 crore by March 2011,” said Riten Ghose, general manager, Mumbai at SBI.

It may happen that other banks too may soon ape the path and we might see more kirana stores offering the services.

“Other banks, private included have been approaching us. But at least for the next couple of months we do not want to sign on any other bank,” said an Oxigen official.

Oxigen has set up 20,000 web kiosks offering other services such as bill payments, railway ticket booking, mobile recharge and DTH payments and banking is another service latched on to the same network.