Reported by: banking|Updated: June 5, 2020
Senior bankers from an RRB, a state cooperative bank, a DCCB, a mahila cooperative bank and urban cooperative bank discuss the various measures initiated to tackle Covid-19 impact in serving customers:
The COVID-19 pandemic is causing unprecedented economic hardship and widespread social disarray across the globe, not sparing anyone. The situation is changing quickly causing widespread impacts that even effective Business Continuity Plans often go haywire. The crisis has not left banks and financial services institutions untouched. And the impact has been severe on regional rural banks and cooperative banks. How have some of these banks reacted to the situation?
Madhya Pradesh Gramin Bank is the second largest bank in the state in terms of number of branches (866), operating in 39 districts. The bank has been created with the sole objective of ensuring sustainable rural development by providing effective credit support to the rural entrepreneurs. The bank’s chairman Sunil Sharma says the bank is operating with the highest number of rural branches (538) in the state and 88% of its branches (766 out of 866) are in rural and semi urban areas.
TAKING CARE OF STAFF
Sharma reveals that all the offices of the bank are currently functioning under essential services. It is taking care of all the staff members, ensuring that that they take all the precautionary measures like maintaining social distancing, proper cleanliness, use of face masks, gloves, sanitizers, etc while performing their duties. “We have instructed all the branch heads and regional managers to only call those staff members whose services are very essential. Moreover, at the controlling offices we have also implemented work from home system and only 30-50% staff is coming to the office on a daily basis. We have a total dedicated work force of more than 3400,” he says.
The Gujarat State Cooperative Bank has initiated adequate measures to ensure social distancing and regular sanitization at all the branches and HO premises. Vinod Shah, the bank’s CIO and General Manager (IT), says the business continuity plan is already in place to handle emergency situations leading to availability of limited resources (infrastructure & manpower) under lockdown condition. The bank has cut office hours for customers and necessary infrastructure has been created to facilitate work from home (WFH) for a large number of employees. Critical staff is being rotated and the impact on working is being monitored on a daily basis.
Surat DCCB has also taken all precautionary measures as directed by the central and state governments. The State Level Bankers Committee and Lead Bank (Bank of Baroda) are issuing circulars on each activity to be undertaken at branch level under such situation. Social distancing norms are being carried out strictly at the branches and customers are mandatorily required tu use hands sanitizers. Naresh B. Patel, chairman of the bank, says some of the branches where there is heavy rush of customers is observed, have made erected temporary sheds and chairs are provided for the customers so that they can wait in comfort. Token numbers are issued to the customers.
The bank has created A and B teams of staff to take up duties on alternating days. It has also given permission to some of the staff members, including handicapped persons, pregnant ladies and people with chronic ailments to work from home. Says Patel: “We have already discontinued the practice of recording attendance using biometrics. Similarly, we have also arranged for staff members to work from their nearby branches. We also held a seminar for the staff where one of our customers and a renowned doctor Haribhai Patel explained to them the critical nature of the pandemic and the dos ands don’ts they should follow.”
Udaipur Mahila Samridhi Cooperative Bank, a women’s cooperative bank, has taken a number of precautions. It has engaged additional security guards to control and restrict the movement of the customers at its branches. Staff members have been educated on the precautions to be taken and notices have been displayed in each branch listing these precautions and measures to follow. Customers have to use hand sanitizer before entry into the branch and at the time of exit as well. The bank also has a special helpline number for customers for any kind of help.
Vinod Chaplot, the bank’s CEO, says all the staff members are required to wear face masks and gloves are essential for cashiers. Social distancing arrangement has been made by putting chairs in front of counters to maintain 1-meter distance between customers and the staff. Cleaning of counters, handles of doors, railing and each touchable area with hypochloride solution is being undertaken every 2 hours. “When there is a shortfall in sanitizer in the market, our team is ready to make it at our offices, using alcohol, glycerine as well as fragrance. Each branch has to report daily to HO regarding the health of the staff and any suspected or infected customer who may have come to the branch; we are doing safe banking,” he adds.
At Udaipur Mahila Samridhi Urban Cooperative Bank the CEO has been made the single point of contact for regulatory issues and for outside agencies. Says Chaplot: “We have taken certain measures under BCP. All our meetings are now happening in digital mode, using facilities like WhatsApp. We have reduced our bank timing – it is now from 10 am to 2 pm. We have also minimized the staff strength in offices by 50% by rotating the staff. Another effort is to reduce the number of customers in branches. Accordingly, messages have been sent to the customers to make use of digital channels as far as possible and avoid visiting branches unless it is absolutely necessary.
Prime Cooperative Bank of Surat also has been taking precautionary steps. Anand Bakshi, chairman, of the bank, says from 14th March onwards, the bank has started staggered duty hours for its staff with 50% attendance.
Says Bakshi: “We will be funding our microfinance borrowers – 500 or so of them – for purchasing grocery, milk and vegetables and fruits. We will also be offering the benefit of the moratorium to all the borrowers.”
Veraval Mercantile Cooperative Bank has sanitized all its buildings. It also takes proper care of visitors by making it compulsory for them to use sanitizers, wear masks and keep proper distance while in the bank branch. The staff is rotated in their duties. Atul Shah, general manager of the bank, says the bank has also kept barricades in branches to ensure that customers keep suitable distance while interacting with the staff.
Video Meet: Digital Edge
Gujarat State Cooperative Bank has told all its customers to make increasing use of the digital channels and reduce or totally avoid going out of their homes/visiting bank branches. Vinod Shah says wherever required, the bank makes use of video / audio conferencing and remote access technology to ensure smooth and uninterrupted operations. “We are ensuring that all online channels and ATMs are working 24 x 7 without any disruptions. Banners highlighting preventive measures needed to be taken are displayed at all the branches. Creatives / pop-ups are being displayed on our website and social media channels,” he adds.
All the branches of Madhya Pradesh Gramin Bank, which are on CBS, offer services like ACH Debit/NACH Credit, EBT and ECS and the bank is participating in CTS clearing at various centers. It also offers internet banking (view mode) and RuPay ATM cards. Sunil Sharma says the bank offers AEPS facility at microATMs and kiosks through BC points. It is also using BCs for distribution of money under DBT and providing doorstep banking services using BCs as well as staff members. “In addition, we have enabled opening of SHG accounts and transactions at BC points through kiosks/microATMs using Dual Authentication System,” he adds.
In response to NABARD’s directive, Surat DCCB has advised all its customers to make use of digital channels like UPI, USSD, IMPS, NEFT, mobile banking and debit/credit cards only. Naresh Patel mentions that the bank has been holding its board meetings/sub-committee meetings through circulating resolutions or using video conferencing/tele-calling. Minimal staff members remain present in our data center, says he.
Veraval Mercantile Cooperative Bank has taken several preventive measures to counter frauds and cyberattacks on its systems in these days when most of the staff are not present in the office or are working from home. Atul Shah says it will become a challenge when more people work from home or become ill or less efficient. The bank has therefore created 2 teams – a core team and an operations team. “If an infection cluster appears in one, the business unit can still carry on operating. A big concern is the rise in cyberattacks and fraud, as consumers, businesses and employees adapt to the new environment. Crisis and rapid changes always create an opportunity for bad actors, and COVID-19 will be no different,” says he,
Agri NPA Will Increase
Though the rabi crop is ready for harvest, farmers are not ready for want of laborers. Surat DCCB has most of its branches in rural rareas and as much as 70% if uits customers are agriculturists. Naresh Patel says the Surat APMC has done a wonderful job by creating a system of procurement for farmers and small vendors.
He also states that farmers are unable to repay their instalments and interest because of the crisis. “We have always been able to maintain a recovery rate of 97% to 99%, but this year, it will be 70% to 75%. We have received Rs25.57 million under DBT covering 52,031 accounts, Rs62.18 million to 22,363 accounts through NACH and Rs68.91 million to 34,455 accounts under various prime minister’s schemes,” he says.
Vinod Shah says Gujarat State Cooperative Bank, in consultation with NABARD, will be implementing all the guidelines on banking operations, social welfare schemes, ST (SAO) and additional ST (SAO) on priority basis to support the people/ farmers / daily wage workers.
Atul Shah says over 100,000 customers of Veraval Cooperative Bank are now being placed under lockdown and this may lead to their inability to pay loan installments or interest of overdraft regularly. Also, business loans, especially to small and medium enterprises, are at risk due to the forced shutdown, he adds.
The Gujarat State Cooperative Bank has granted a moratorium of 3 months on payment of all instalments falling due between 1 March and 31 May 2020. Vinod Shah says the bank has ensured that rescheduling of payments, including interest, will not qualify as a default for the purposes of supervisory reporting and reporting to Credit Information Companies.
The lockdown has led to lower demand for grains, vegetables, fruits, dairy products and flowers. Also there is delay in harvesting of rabi crop and Sunil Sharma of Madhya Pradesh Gramim Bank concerned that farmers are facing financial problems and are not been able to service their agriculture loans. This may have an impact on growth in agriculture sector and may also increase non-performing assets of banks during next quarter, he adds.
Surat DCCB has evolved a plan of action to tackle the resulting challenges in rural credit. Since last 6 years, the bank is giving Kisan Credit Cards to farmers at 0% interest rates and it has decided to continue this facility this year as well. The bank is also proposing to give soft loans to farmers at a cheaper interest rate, so that they can repay depending on their income generation and poor, needy farmers can take care of their family needs. It is also planning to reduce the rate of interest on all loans given to the farmers.
Atul Shah is confident that in the coming years, consumers will be concerned about infection and this will accelerate the switch to a cashless society and the adoption of alternative integrated payment features, powered by mobile wallets. Personal mobile devices will become a user’s central operating device, he says, and this will enable payments to peers and to businesses. “Customers will use mobile devices to operate ATMs and terminals remotely without touching the screen. Technology providers should be focusing on alternative authentication methods through biometrics,” says he.