‘Like doctors, health workers, police, bankers are also COVID warriors,’ notes Tamal Bandyopadhyay.
Baskar Babu Ramachandran, managing director and CEO of Suryoday Small Finance Bank Ltd, says at least 100,000 microfinance borrowers of his bank paid their loan instalments through digital channels in May.
His bank has around 1.3 million such customers.
Loans have always been disbursed digitally, but when it comes to repayment of loan instalments or collection, as opposed to disbursement by the bank, each and every borrower of Suryoday SFB has paid in cash till March this year.
In April, a few thousand customers used the digital channel as they were confined to their homes because of the lockdown.
In May, that number swelled to 100,000.
Another unlisted small finance bank headquartered in Bengaluru, along with the National Payment Corporation of India, launched a UPI QR-based loan instalment payment facility for its customers in end-March.
QR or quick response code is a type of 2D bar code that is used to provide easy access to information through a smartphone.
This channel is typically used for P2P (person to person) and P2M (person to merchant) payments.
A total of 4 million customers of this SFB can also check the balances in their savings accounts and fixed deposits via their mobile phones.
Kotak Mahindra Bank has recently introduced video KYC to open savings accounts.
This is a pilot project and the bank wants to extend this to get customers on board in a zero-contact digital way for other products in a phased manner.
Three years ago, demonetisation gave a big push to digital banking in India.
Now COVID-19 is giving it an even bigger push as bank customers are opting for social distancing.
Even octogenarian pensioners are refraining from visiting branches and instead learning how to bank through their mobile phones from their grandchildren.
This is a good omen. All banks are gearing up to seize the digital opportunity to bring down the cost of customer acquisition and cut down the turnaround time for transactions.
The crisis is also opening up new business avenues for banks.
For instance, the demand for loan against gold has been rising every day.
In small towns and even in villages, cash-strapped families are rushing to bank counters to borrow against gold ornaments.
This is one part of the banking story in India during the current pandemic.
The other part is the grit and determination with which the bankers are going about their business…