Ad Here  
March
April
May
June
July
August
 
 
Governance in Reverse Gear? Monetary policy continues to adopt dis-inflationary path Small finance banks offer high interest rates Bank deposits account for 46.3 per cent of household savings Cradle of banks to a smart city... Rationalised Financial inclusion vs unclaimed deposits A development bank for BRICS Why priority status? Ernakulam excels... Cut in repo rate – lower than expected Insatiable appetite for credit All that glitters is not gold... Indian customers are tech savvy Bottomlines shrink, bad loans rise... Managing NPAs... Just 660 days! Target over-ambitious... Drop in SLR- sparing lendable resources The paradox: clamour for the Goliath and David Banking in Telangana Smart banking in smart cities Banking on Risk United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Good, bad and ugly Cautious and considerate Merger mania haunts banks Nothing much can happen…. Big bank merger, bigger expectations Ferrying digital banking to Lakshadweep Reaching out: is it slowing down? Anytime banking to anywhere banking Drastic decline in asset quality The collaboration suite of cyber criminals A bank for women, by women Banking overhauling or reorganisation? Perhaps small is more beautiful than big! LVB- A supermarket of financial services Thirty more cities seek to become SMART Mega merger is on Small finance payment banks... Hesitancy in announcing year-end results Aadhaar, niraadhaar and banking Grows Bigger Holy or unholy? It’s a war on black money, support it. Reaching the Unreached… Why any time money? Greet Lakshmi the banking robot Another route for achieving financial inclusion New bank licences, at last... Well-lived... How ‘secure’ are the secured loans? What is the priority – mergers or NPA reduction? Too big to fail and too small to sail Emerging crisis Targets continue to be ad hoc A new development bank rising in the east… Growing volume of stressed assets… Lacklustre credit expansion New capitals of Migrant banks Payment banks have arrived Who is the real beneficiary? Small is ‘more’ beautiful Capital base of regional rural banks raised Two banks: their jubilees and performances Growing gainfully Needed a Banking Atlas How okay are new banks? One down in private sector From lazy banking to easy banking Stage set for Indian ‘avatar’ of foreign banks Fund healthcare clinics in villages...
 
Ferrying digital banking to Lakshadweep
The Union Territory of Lakshadweep is rarely in the news. A remarkable development on the banking front has silently taken place in these far off island.

It is a unique case, where not only the island economy is monetised but its banking also is digitised. These islands, isolated as they were, could see banking activities only in 1971.

Money was not a medium of exchange here till the 1930s. British economist Prof. D H Robertson, who visited these islands in 1931, recorded his impressions in an article, A Visit to Laccadive Islands. Observing the prominent prevalence of barter, he wrote: “rice is not bought for money, but is bartered by the Government, at a fixed rate of interchange, for coir or coconut hair, which is the staple product of the islanders.”

When the Lead Bank Scheme was introduced in 1970, Lakshadweep was allotted jointly to Syndicate Bank and Canara Bank. While Canara Bank was unwilling, Syndicate Bank took the sole Lead.  I must say that I had a role in Syndicate Bank’s entry into Lakshadweep.

 

Entry of banking

Syndicate Bank opened the first branch at Kavaratti in 1971 and now it has nine branches in different islands and ten ATMs in these branches. Two other public sector banks, State Bank of India and UCO Bank, have also opened offices here and have four ATMs. One of the private sector banks, Yes Bank, also has a branch and an ATM. The total number of branches of the four banks is 12, and all of them are under Core Banking Solutions.

The total deposits mobilised by these banks in the islands are Rs.6635 million as on December 2014. The number of deposit accounts served by the banks is 73,286 as on March 2013, of which savings bank deposit accounts are 68,468.  For a population of 64,429 (Census 2011), the total number of savings bank accounts of 68,468 (Data of 2013) is very high.

A bulk of the deposits is from the household sector.  According to data published by the Reserve Bank of India, 77 per cent of the deposits in these branches are owned by families. Evidently saving habits - investing in bank deposits - have visibly grown in the households. It is indeed a long journey towards monetisation from the barter economy of 1931.

 

Financial inclusion

One more interesting feature of banking development in these colourful islands is the notable progress made in financial inclusion. According to Census 2011, out of 10,703 households in Lakshadweep, 9127 families have availed banking services. The percentage of households availing banking facilities at 85.3 is one of the highest among all the states (The All India average is 58.7 per cent). In some of the smaller states in the north-east, this ratio is much lower: Manipur 29.6 per cent; Nagaland 34.9 per cent and Meghalaya 37.5 per cent. Surprisingly, Andaman and Nicobar Islands have a better record, at 89.3 per cent.

It must be admitted that banking penetration into these far off islands would not have taken place but for the nationalisation of banks. Whatever may be the other outcomes of nationalisation, positive or negative, this is a tangible development.

----------------------------------------------------
The author is a former CMD of Syndicate Bank

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com