From Grassroots to Greatness: Anil Bhavnani on Unleashing the Power of Semi-Urban & Rural Banking at HDFC Bank

M C Dominic: Welcome Anil, we would like to know about HDFC Bank's new initiatives in rural and agriculture sectors. What are the unique activities that you are starting now?

Anil Bhavnani: Thank you for having me. HDFC Bank has been dominant in the metro and urban segments for the last 28 years. But as a part of our growth engine, we realize that semi-urban and rural segments are growing rapidly, and 60% of the country’s population is based in semi-urban and rural areas. One of the important sectors in semi-urban and rural areas is agriculture. Currently, we have lending of INR 75,000 crore in the agriculture sector, which is the highest among all the private sector banks. As part of our regulatory obligation, we need to lend a certain percentage of our book to small and marginal farmers. So, we have launched new products specifically for small and marginal farmers, including unsecured lending, for both existing and new customers.

Additionally, we are participating in the RBI’s pilot project for end-to-end digital cattle finance. We are the only bank piloting this project, and once it is successful, other banks will replicate it. We believe this initiative will make lending to farmers more efficient and help them get their money on time.

To improve our geographical presence in semi-urban and rural areas, we have started a concept of “Bank on Wheels,” which is a moving vehicle that can provide banking services to customers in unbanked areas. We have already launched seven Bank on Wheels in the country and plan to launch 300 more. The Bank on Wheels will be stationed in prominent places in the village for a specific time period every week, where customers can deposit cash, withdraw cash, do their Aadhaar updating, take a gold loan, or take an agriculture loan.

M C Dominic: Will the HDFC ‘Bank on Wheels’ keep on moving the village, or will it be stationed at one prominent place every week?

Anil Bhavnani: The Bank on Wheels will move between two different locations on the same day and same time every week. For example, it will be stationed in one particular place every Monday from 10 am to 2 pm and then in another location between 2 pm to 4 pm. We realized that reliability and continuity are essential to developing trust in banking, so we keep the same schedule every week.

M C Dominic: Do you have any special products available on all seven days?

Anil Bhavnani: We have created special products for farmers to address their challenges, including inadequate lending, documentation, and turnaround time. We understand that farmers have two crops – Rabi and Kharif – and if they need money during these seasons, they cannot wait for a long time. Therefore, we have launched products like Kisan Gold Card, Kisan Credit Card, and Kisan Dhan Vikas e-Kendra to provide easy and quick access to credit. Additionally, we are launching new products for dairy and livestock farmers.

M C Dominic: What is your plan to increase your presence in semi-urban and rural areas?

Anil Bhavnani: Currently, 51% of our branches are in semi-urban and rural areas. We plan to add 1200 to 1500 branches in the next financial year, which will increase our presence to 55% in these areas. We have already covered close to 2 lakh villages in India, and we want to increase this number to 2.5 to 3 lakh villages in the next six months.

M C Dominic: That's really interesting. So, how has the response been so far from the rural and farming community? Have they been receptive to these initiatives?

Anil Bhavnani: Yes, the response has been very good so far. In fact, we have received a lot of positive feedback from our customers in the rural and farming community. They appreciate the fact that we are making an effort to reach out to them and provide them with better financial services. We have also received a lot of applications for our new products, especially unsecured lending products for small and marginal farmers. The Bank on Wheels concept has also been very well received, as it is making banking services more accessible to customers who are living in remote areas.

M C Dominic: That's great to hear. Can you tell us about any challenges that you have faced while implementing these initiatives in rural areas?

Anil Bhavnani: Yes, there have been a few challenges that we have faced. One of the biggest challenges is the lack of awareness and education among the farming community about financial products and services. Many farmers are not familiar with the various financial products that are available to them, and they may not know how to access these products. Another challenge is the lack of infrastructure in some remote areas. Some areas do not have proper roads, electricity, or internet connectivity, which makes it difficult to provide digital banking services. We are addressing these challenges by conducting awareness programs and providing training to our customers, and also by working with the government and other stakeholders to improve the infrastructure in rural areas.

M C Dominic: That makes sense. So, what are your future plans for HDFC Bank's initiatives in the rural and farming community?

Anil Bhavnani: Our future plans are to expand our presence in the rural and farming community even further. We are planning to add between 1200 to 1500 branches in the next financial year, which will increase our geographical presence in semi-urban and rural areas. We are also planning to launch more Bank on Wheels in unbanked areas and to introduce new products and services that are specifically designed for the rural and farming community. Additionally, we will continue to work closely with the government and other stakeholders to improve the infrastructure in rural areas and to create more awareness about financial products and services among the farming community.

M C Dominic: Sounds like you have some exciting plans for the future. One final question, what message would you like to give to the farming community in India?

Anil Bhavnani: My message to the farming community in India is that HDFC Bank is committed to supporting their financial needs and helping them achieve their goals. We understand the challenges that farmers face, and we are here to provide them with the best possible financial solutions. We encourage them to reach out to us and to take advantage of our products and services, which are specifically designed to meet their needs. We believe that by working together, we can help create a brighter future for the farming community in India.

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