PSBs Predict Quadruple Rise In Doorstep Banking By FY28
Public sector banks (PSBs) are anticipating a substantial surge in doorstep banking (DSB) transactions, projected to increase approximately fourfold to 1.30 crore by FY28 from an estimated 30 lakh in FY24, based on data from PSB Alliance (PSBA).
Over the span of five years, from FY24 to FY28, the 12 PSBs, operating with approximately 86,500 branches nationwide, are estimated to collectively conduct around 4.55 crore DSB transactions, encompassing both financial and non-financial services.
PSB Alliance (PSBA), serving as an overarching body for all PSBs, concentrates on delivering a range of financial and non-financial banking services directly to customers' doorsteps. The inception of DSB services by PSBA dates back to September 2020.
Two corporate business correspondents, Integra Micro Systems (also offering a DSB technology solution) and BLS International Services, have been authorised by the Alliance to deliver DSB services to PSBs through feet-on-street (FOS) agents at more than 6,800 centers nationwide.
This move carries significance, potentially supporting the Indian Banks' Association's proposal to declare all Saturdays as holidays under the Negotiable Instruments Act. FOS agents are operational on all days, including bank holidays, offering DSB services. Presently, banks remain closed on the second and fourth Saturdays besides Sundays and local holidays.
FOS agents facilitate various DSB services such as collection and delivery of cheques, drafts and pay orders, online Life Certificate collection via Jeevan Pramaan App, delivery of account statements, non-personalised cheques, drafts, pay orders and more. Additionally, they enable cash withdrawals (ranging from Rs. 1,000 to Rs. 10,000) through microATMs.
The estimated total IT cost for providing DSB services to PSBs over five years (FY24 to FY28) stands at Rs 49.50 crore. This cost will be allocated among the 12 banks based on their size and transaction volumes.
The proposed average FOS costs across different regions and categories amount to approximately Rs 45 per transaction. PSBA suggests levying an additional Rs 5 per transaction on top of the service cost paid to vendors. Furthermore, the company anticipates an annual reimbursement of Rs 20 lakh from each bank for DSB service delivery. Revenue from customers is estimated at Rs 75 per transaction.
