State Bank of India (SBI) has sensed an opportunity to expand its banking network to the unbanked pockets of the state of Odisha through customer service points (CSPs) with the infrastructure support of the local government.

 The country’s largest bank plans to have 1,561 new CSPs over a period of time, besides the 30 branches it is adding in the current financial year. This will take the bank’s total tally to 7,718 CSPs and 915 branches in Odisha.

The new CSPs, located in the unbanked gram panchayats, will be developed with the state government providing the necessary infrastructure, including building, internet service, information technology, furniture and other logistics.

 “The state government is looking to provide banking services in all the unbanked gram panchayats and will give us the necessary infrastructure support. SBI is constantly trying to penetrate into the far-flung areas of the country. With the state government’s support, it makes our task much easier,” SBI chief general manager and head of Odisha circle Chandershekhar Sharma told www.indianbankingnews.com.

  The Naveen Patnaik-led BJD government in Odisha has taken the initiative to provide banking facilities in all the 4,373 unbanked gram panchayats of the state through CSPs by partnering with six public sector banks, including the SBI. The others are Union Bank of India, Punjab National Bank (PNB), UCO Bank, Bank of India and Bank of Baroda.

 The novel scheme, called CSP Plus, aims to cover the remotest regions in a state where banking penetration is quite low and not uniform across the districts. There are 6,798 gram panchayats in the state but around 65% of them do not have brick-and-mortar branches.

 The state government has made a provision of Rs 500 crore for the scheme. It will provide rent-free banking space for five years. It will also bear one-time expenses for fixed costs and recurring expenses for a period of three years.

 “There will be no cost implication for SBI. Our CSPs incur all the expenses for setting up of their outlets. However, as fixed and recurring costs are being taken care of by the state government in this case, sustainability and profitability of the CSP outlets are ensured,” said Sharma.

 The CSPs in the gram panchayats will offer customers services like basic savings bank deposit account (a zero balance savings account that takes care of simple banking needs with free ATM card, monthly statement and cheque book), cash transaction, recurring deposit, fixed deposit, account opening and Aadhaar enabled payment system (AEPS).

The other facilities to be provided at these CSPs include: PPF/ Sukanya Samridhhi Account Opening; PMJJBY, PMSBY, APY enrolment and renewal; Bharat Bill Payment System (BBPS) for electricity, telecom (mobile, landline, broadband), gas, water bill and DTH; request services (cheque book, stop payment, life certificate, apply for debit card, pass book update); lead generation in current account opening; formation, promotion including credit linkage of SHG/JLG; collection of new KCC proposal/renewal/activation; collection of KCC and retail loan through micro ATM; recovery in NPA (non-performing asset) accounts; and scouting of loan applications and sanction of eligible cases within the stipulated time period.

 Lending to projects supported by the state government in an election year will also keep the SBI’s Odisha circle busy. Besides its normal lending activities, SBI will be engaged in the interest-free scooter loans to women self-help group (SHG) members and a credit-linked housing scheme (MO Ghara) for the rural poor in the state.

 Under the Mission Shakti Scooter Yojana, there is a provision of interest subvention on bank loans up to Rs 1 lakh to the community support staff and executive committee members of women SHG federations to buy scooters so that they can be more mobile. Nearly 1,25,000 federation leaders are expected to benefit from the new scheme.

 The Mo Ghara (My House) scheme provides financial assistance to beneficiaries who face fund crunch to complete or upgrade their houses. The aim is to convert all kutcha (thatched) houses into pucca ones with concrete roof.

 The family which is staying in kutcha house or in one pucca room with concrete roof would be eligible for the loan. Their monthly income should be below Rs 25,000. They should also be without a non-commercial motorised four-wheeler for personal use. Availing housing assistance of Rs 70,000 or below in the past will make them ineligible.

 The Mo Ghara scheme will provide housing loans of up to Rs 3 lakh, repayable over a 10-year period. It offers four different loan categories, ranging from Rs 1 lakh to Rs. 3 lakh.

 The state government will release capital subsidy to the loan account of the beneficiaries on completion of the house. A higher capital subsidy will be available to vulnerable groups such as scheduled castes, scheduled tribes or families led by individuals with disability.

As per the scheme, the State government will pay highest Rs 60,000 subsidy for Rs 3 lakh loan slab while vulnerable groups would get subsidy of Rs 70,000.

Talking about the expansion plans in the state, Sharma said the bank has recently introduced wealth management services.

 SBI is looking to expand its loan book in the Odisha circle to Rs 61,549 crore in FY24, up from Rs 49,549 crore a year ago. The state-run lender has a loan pipeline of Rs 500 crore in over 100 projects in the current financial year.

 “The loan outstanding has touched Rs 55,119 crore as of 30 November 2023. We are looking to add Rs 12,000 crore during the current financial year. We have increased our market share in advances from 25% to 27.18% as of 30 September 2023 and want this to further climb to 30% by the end of March 2026,” said Sharma.

 On the deposit front, SBI is looking to increase its market share in Odisha to 40% by March-end 2026, from 36.69% as of 30 September 2023.

 “Our deposit base has increased from Rs 1,63,166 crore on 30 March 2023 to Rs 1,69,922 crore as of 30 November 2023. Our deposit mobilisation target is Rs 20,000 crore in the current financial year,” said Sharma.