banking needs , not only financial transactions but also the ancillary services through mobile so that the mobile itself becomes a bank in terms of all the customer requirements . The number of physical branches is going to be a non specific requirement for the customers to choose where to bank with and the same will be decided more by how technology oriented the bank is .
With all the above , we see that there will be humungous growth in the digital transactions of small value . There will be a serious drift of the end customer from cash to non cash . There would also be a major shift from the more expensive modes of digital transactions like use of cards to mobile and internet based transactions which are more cost effective .
Q . With the increase in digitization , the banking sector is moving towards non-branch approach . Do you foresee the same for Cooperative Sector ? If yes , what are the measures of improvement that are required to be taken by the sector ?
Mr . Srinivas : The cooperative segment of banks is the poorer cousin in terms of technology adoption and change . They do not have sufficient trained resources to adopt and use technology . IT and ITES are always investments that will become profitable when they stay on for a longer term . The banks suffer from lack of corpus for investment of huge sums in technology and maintain infrastructure . But contrary to all these issues , there has been a fast adoption of technology as there is a great opportunity to avail themselves of all these through hosted services offered by VSoft . There is also a compulsion for the cooperative segment to adopt technology as most of the commercial banks under the compulsions of the branch opening in tier V and tier VI centers are there in the immediate neighborhood and on ground zero all the banks compete for limited banking opportunity present in these locations .
Q . Just like demonetization , digitization dominated Finance Minister Arun Jaitley ’ s 2017- 18 Budget speech . What provisions have been made in the budget in this regard in cooperative sector ? Apart from this are there any rules and regulations to make digitization of cooperative sector ? Are there any deadlines
APR 18 49
The main provisions of the budget has been a major uplift to the rural areas , more particularly to the cooperative sector . Like huge budgetary allocation for computerization of the Primary Agricultural Cooperative Societies ( PACS ) and bringing them on par with the banks in terms of adoption of technology . This not only helps the PACS in serving the growing demands of the customers but also to provide timely and accurate MIS for the policy makers to understand , sharply define and appropriately design policies to cover reliefs and remissions to the sector .
The rules are the general ground rules that are laid down for the banking industry but computerization of the entire Cooperative credit structure is the premise with which the budgetary allocations under this segment were drawn . The deadlines are that all this has to be achieved over a 3 year period commencing from the fiscal 2018 . However , we have not seen much progress made in this direction . If the deadlines have to be met with a ready made solution designed to deliver the objectives envisaged by the Central Govt is what is required and that is where VSoft expresses its readiness for delivery and deployment of its applications which are tailormade to suite the requirements specified .
Q . How is digitization going to help the cooperative sector in risk management ?
Mr . Srinivas : Since most of the institutions in the bottom of the Cooperative segment depend largely on the data maintained in the manual ledgers , collation of information , compiling the same , accurate and timely submission of the information to the policy makers is always difficult . Also , an integrated approach combining various parameters is always difficult as references have to be made to various ledgers for a 360 degree view of the customer . Since the Cooperative segment has a refinancing mechanism at each of its tiers , the original collateral is always at the bottom most part of the credit pyramid whereas the same is the basis for drawing refinance at the Apex level from NABARD . Since there are no linkages between two successive tiers in terms of a straight through processing , the data at different levels does not re�ect the realtime position . Also , there are so many manual operations the efficiency of which largely depend upon the intelligence and capability of the person handling it . All these entail a huge risk . Digitization helps in mitigating all these risks .