BANKS TO EXTEND OUTREACH TO UNDERSERVED AREAS

AMANULLAH BASHAR
(feedback@pgeconomist.com)
Sep 26 - Oct 2, 20
11

The central bank, being the regulator of the financial services, is actively considering to enhance the outreach of commercial banks to the underserved areas to tap the rural economy.

Besides enhancing the coverage to the untapped areas, the ongoing review of policy and regulatory environment is also under consideration to promote SME, agriculture. and micro finance as a viable and mainstream business activity for banking sector.

The State bank of Pakistan (SBP) is also undertaking review of existing prudential regulations for SME financing, to develop separate prudential regulations for small & medium enterprises. When implemented, this exercise would facilitate small enterprises' access to bank credit and consequently raise their share in banks' loans.

Since SBP is committed to use all possible means to make the banking services accessible to all segments of the society. It has issued directives to all commercial banks to ensure banking facility to the underserved areas across the country. It will not be out of place to mention that more often than not that the bank branches of almost all leading banks present an overcrowded look in the posh localities of the major cities while the countryside has been neglected maybe due to law and order situation and non-availability of the willing staff to serve in villages etc.

The Managing Director SBP Banking Services Corporation Qasim Nawaz in his opening remarks at a two-day Banking Exhibition highlighted various initiatives taken or being taken by the State bank to facilitate the underserved sectors of the economy in the field of agriculture, SME and microfinance sector.

Some of the steps being taken include introduction of Credit Guarantee Scheme for Small & Rural Enterprises (CGS) to share credit risk with banks (up to 40 per cent) with the objective of increasing banks' lending in neglected sectors/areas. Around 2,000 accounts have been issued guarantee under CGS. Rs925 million have been disbursed to small and rural enterprises under CGS and SBP shares risk worth Rs392.5 million with commercial banks for their lending to this sector.

The central bank has also introduced Microfinance Credit Guarantee Facility for resolving liquidity problems for microfinance banks/microfinance institutions. Ten MFBs/MFIs have been provided funding facilities worth Rs2.8 billion under the scheme by banks. SBP BSC has provided guarantee cover of Rs805 million for the lending by commercial banks to MFB/MFIs.

The banks have taken initiative for Refinance Scheme for Modernization of SMEs, Refinance Scheme for Agriculture Produce Storage Construction, and crash training program for the SME and agricultural credit officers of banks. Special capacity building programs for MFBs/MFIs and Islamic banks are also in the pipeline.

SBP is also organizing SME, micro, agriculture and Islamic seminars, workshops, exhibitions and melas in cities and rural areas in collaboration with banks, Smeda, and provincial agricultural, livestock departments to create awareness amongst the stakeholders at grassroots level about financial services.

Taking a lead towards enhancement of customer services in line with the policy direction of the central bank the national bank of Pakistan has launched a call center operations based on latest available technology. Actually, facilities like call center is a basic need of the customers and every emerging bank should follow suit because the working environment in the banking system still needs a lot of improvement especially the conduct of the banking staff with the customers.

The call center launched by the national bank would help the customers for any account information inquiry, complaints, registration request, ATM card blocking, and home remittance product information. The call center operations will certainly help NBP customers in getting more efficient response on all the above mentioned services.

Actually, NBP besides improving financial services has also taken many initiatives to provide better quality social facilities in the form of medical and educational solutions to far flung areas of the country.

ATM FACILITY

Last week, the national bank joined hands with NCR Corporation to install 150 ATMs nationwide in branches of NBP and expansion of NBP ATM Network. In fact, the auto teller facility needs extra care to serve the customers because the ATM facility is the only option to draw cash when the banks are closed during holidays and or disturbed conditions on any account.

With this expansion, NBP will further strengthen its ATM network across country and will have more than 500 branches with ATMs to facilitate its customers. With increasing demands of customers for having alternate delivery channels, the management of the bank decided to increase ATMs within its branch network along with other value added services to the customers. ATM is still the most preferred channel by customer globally for their transaction needs including cash dispensing and deposits, funds transfer, bill payments, balance enquiry etc.

ONLINE BANKING

NBP has embarked upon technology up-gradation and modernization with implementation of centralized core banking and branch connectivity to bring 1100 branches online as well as contact center for giving its customers most modern banking services in addition to this ATM expansion program.

No doubt, that the automation of the banking services has revolutionized the culture of customer services besides reducing the administration cost. However, orientation of the banking staff with the new culture is equally important as the banking staffs mostly in the privatized banks are still living in the old days of lethargy and arrogant dealings with the customers.