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Kerala UCBs not lagging in technology implementation

Kerala, which tops the country in matters of literacy, is in no way lagging behind in adoption of digital technology. The may soon be occupying the coveted position in this aspect as well. For, even urban cooperative banks (UCBs) in the state seem to be vying with each other in implementing/introducing information technology in their banking operations and services and are also getting ready to take on the commercial banks. A discussion with 3 UCBs in the state regarding implementation of technology in their banking operations and its impact reveals this trend. The 3 UCBs are Sultan Bathery Urban Cooperative Bank in Wayanad, one of the most-hilly districts, Ottapalam Urban Cooperative Bank in Ottapalam, a small town in Palakkad district and Thrissur District Cooperative Bank, in Thrissur, one of the well-banked areas in the state.

Sultan Bathery Urban Cooperative Bank has implemented core banking system in all its branches for all the banking operations a few years ago. According to the bank’s chairman Prof K.V. Thomas, the bank in the last few months has successfully implemented systems to facilitate eCommerce and POS transactions. In addition, the bank’s RTGS and NEFT transactions are also being automatically processed.


While the actual number of such technology-driven transactions has not been exactly determined, Thomas says he is confident that the number of RTGS/NFT transactions carried out in all its branches last year is well over 25,000. CTS transactions are also over 30,000 and even eCom transactions were over 1000. As for ATM transactions, the bank has achieved a figure of 1 lakh, which is a relatively credible achievement for a small UCB operating in the hilly terrains of the state and having a clientele composed of mainly rustic tribes. What is more significant is that many of the bank’s customers are elderly women, who readily embraced the digital transformation.

Even in regard to advances, Thomas points out that all the loan applications are processed through CBS and the bank is utilizing the services of credit rating agencies. It is a member of CIBIL and 3 credit rating agencies and this has really helped the bank and its growing number of customers.

Ottapalam Urban Cooperative Bank too has undertaken several IT initiatives in the last one year. Though a relatively older bank – it was set up in 1937 – the bank has marked its presence by operating in one municipal town and 5 panchayat areas through its 9 branches and 9 ATMs. According to its general manager, T. Gopinathan, the bank has introduced some of the products of NPCI like ACG credit, APBS, MMS and DBS, which have been well-accepted by its customers.

Alternate Channels

The bank has also recorded an increase in the use of various alternate banking channels and digital payments in the last 12 months. According to Gopinathan, its RuPay debit card users has gone up by nearly 2000. As for the number of transactions in NPCI–NACH credit, it has gone up by 500 and under NPCI–APBS credit, it has increased by 300. He further adds that over 1000 customers have already enrolled themselves for availing of e-Passbook facility in the last 12 months.

Gopinathan is optimistic about bank’s future plans. In February 2018, the bank has started mobile banking with IMPS facility for its customers. It is now carrying out both cKYC and eKYC projects and hope to complete the same by December 2018. Using an innovative software, the bank has also plans of marketing all its products digitally. Further, it is planning of introducing internet banking shortly, subject to the approval of RBI.

Says Gopinathan about the bank’s digital strategy for both existing and future borrowers: “We have shared all our borrowers’ data with CIBIL. So, our existing borrowers can easily avail of their credit score, as and when needed, for future borrowings. We have created an excel template for managing borrower relationship as well as the follow-up for their future needs. We are also planning to implement loan origination and document management system.”


One of the oldest UCBs in this study, Thrissur District Co-operative Bank (TDCB), is in its centenary year. Realizing the needs of its growing number of customers, the bank has been in the forefront in adoption of digital banking technology. It is now able to offer seamless banking services to its customers. It has implemented CBS and introduced ATMs, perhaps one of the first few cooperative banks to do so. Today, it occupies a pivotal position among the cooperative banks in the state.

Dr M. Ramanunny, general manager of the bank lists some of the products and services introduced by the bank in the last one year leveraging on technology:

  • Introduction of eKYC
  • Introduction of micro ATMs through Business Correspondents
  • Introduction of RuPay EMV KCC cards
  • Extended ATM facility to PACS in Thrissur district with a view to facilitate more effective usage of RuPay KCC cards. Consequently, PACCS customers are in a position to use normal RuPay ATM cards by extension of ATM facility. Presently, the bank’s own 39 ATMs and a like number of PACS’ ATMs are extending the service to all the customers of both
  • eLobby has been upgraded with the addition of one more machine, a CTS 2010 enabled cheque depositing kiosk
  • Cashless transactions have gone up

As for the bank’s future plans, Dr Ramanunny added that services such as the Aadhaar-enabled Payment System (AePS), Bharat Bill Payment System (BPPS), Public Finance Management System (PFMS), National Electronic Toll Collection-NHAI (NETC) and Bharat QR P2M (person to merchant) will be introduced in the near future. Pointing out that nearly 40% of all its transactions have been digitized, he says: “This has consequently led to a sharp drop in the rush of customers visiting the branches. Not only that, 50% of all the money transfers are now being effected through mobile banking app and NEFT/RTGS. Even the average number of transactions at our branches through RTGS/NEFT is well over 3300. And for an urban cooperative bank this is an achievement indeed.”

By introducing new products and services making effective use of technology, the urban cooperative banks in Kerala have shown the way. Today, the services some of them offer are on par with those of any other commercial bank. And of course they continue to offer these services with a personal touch that is synonymous with cooperative banks.

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