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Banking Technology in India’s Remotest Islands

The apex cooperative bank in Andaman & Nicobar Islands is inducting several technologies to offer modern customer services

The Andaman & Nicobar State Cooperative Bank has been a pioneer in extending many facilities to its customers and has computerized its counter services in 1992. Its Managing Director K. Murugan, has had the distinction of serving as in charge of various portfolios like vigilance, IT, risk management, digital banking, retail, and marketing.

As many as 37 branches out of a total of 41 are in rural areas. It has 27 ATMs for its 300,000 customers. Besides, it has an all-women branch at Garacharma-II exclusively for women customers. As part of promoting green energy initiatives of the Government of India, it has also set up the island’s first and only solar ATM.


There are 46 Primary Agricultural Cooperative Credit Societies affiliated to the bank, which have 13,000 members and more than 5000 borrowing members. The bank has procured more than 5000 KCC RuPay Cards to be issued for PACS members. Says Murugan: “We have provided IT infrastructure to 24 PACS during 2019-20 and we have identified 5 more PACS for this purpose. As many as 16 PACS have already converted into Multi-Service Centres in addition to their normal credit lending functions during the last FY. We have identified 3 PACS for micro-units under the Cooperative Development Fund in collaboration with NABARD. We have also financed Rs135 million under KCCs till date.”The bank has introduced cash recycle machines at 2 branches, giving its customers the facility to deposit cash without having to stand in queues are cash counters. These machines are available at the urban branch at Port Blair and at the rural branch of Rangat.


Murugan says the digital era is something to embrace and in order to introduce new methods of payments, the bank has endeavored to deploy 52 merchant POS terminals at various trade establishments. This has benefited the customers in a big way during the covid times. He adds the bank will introduce more such measures, he says, which will contribute towards making the islands a cashless economy. The bank has not started internet banking services or do not have BCs for its rural banking activities. Now it is proposing to introduce micro ATMs in areas where banking tools have not been able to penetrate. “In the changing banking scenario, it has become imperative for us to quickly adapt and remain in the market through digital banking,” says Murugan.


The major IT vendors of the bank include Sarvatra Technology, Pune for ATM switch, Wipro for CBS, and BSNL for connectivity. The bank is now implementing Finacle 7 CBS and with the various facilities available in the system, the bank plans to improve its customer relationship management.

The covid pandemic has caused a substantial loss by way of business to the bank. Even customers are impacted. It is now hopeful that the implementation of digital solutions and deployment of IT systems will give an impetus to its plans to improve business. Says Murugan: “We are now in the process of introducing a mobile app using which our customers can do transactions. We will also use the system to enable customers to generate ATM/ debit card PINs using their registered mobile numbers. They will also be able to switch off and on their debit card usage using PoS machines/ ATM machines.”

In order to gain market share in the islands and to establish a strong presence in the region, the bank now proposes to introduce an online collection of school and college fees as well as utility bills and tax payments.The bank has been instrumental in forming more than 800 SHGs in 2018 to help the poor women and widows find a livelihood. It has also introduced insurance schemes for farmers and these farmers have been insured for both rabi and kharif seasons during the last several years. Murugan says in totality the bank has set up 5229 SHGs and financed 4604 of these on 31 March 2020, sanctioning Rs57.2 million.


The bank is all set to provide a range of banking services using mobile vans. These services include RTGS/NEFT/IMPS, POS debit, and e-commerce. Murugan says a demo van has already been put in action and it has fetched excellent feedback from the customers. These vans will reach out to rural and unbanked areas of the islands. Besides facilitating transactions, these vans also do promotional campaigns.  Says Murugan: “In order to sensitize the customers and to make them more digitally savvy, we will organize Financial Literacy Awareness Program, or FLAP, for our customers through the mobile van. This imparts the essence of awareness of banking business and it increases their knowledge about the security and the safety measures for prudential banking norms to follow. We are hopeful this will increase our customer base, which will enable the automatic increase in the deposits of the bank.”

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