Public sector banks (PSBs) have come collectively to form a new company in an attempt to take banking services to the doorsteps of their customers as they battle the challenges posed by the Covid 19 pandemic.

The new company named as PSB Alliance Pvt Ltd will engage banking correspondents on behalf of the 12 public sector banks under a common standard operating precedure (SoP) to provide financial and non financial services directly to customer homes.

Former State Bank of India (SBI) chief general manager and deputy CEO of Reliance Jio Payments Bank, Rajinder Mirakhur has been appointed as CEO of the new company PSB Alliance Pvt Ltd.

"Currrently, different PSBs engage different banking correspondents (BCs) for their doorstep banking services. With this company we are hoping to provide resources which can be used by all PSBs at a low cost," states Mirakhur.

Currently eleven non financial services like pick up of cheques, request for an account statement, request for income tax documents like TDS certificates, delivery of payorders etc. can be done through this facility. Customers can also request a digital life certificate. At present Cash withdrawal is the only financial service provided. PSB customers can request the services through the web, mobile app or phone after an OTP based verification process.

The services are available at a fee of about Rs. 88 per service including GST. A part of this fee will go to the vendor providing the service and rest to the bank.

Mirakhur said "We are still finalising the model to scale up. We can either hire different BCs and use their technology and manpower or create our own application to be used pan India by all BCs servicing PSBs which will create standardisation and ensure all can plug into the system, which is more feasible."

Right now, two service providers, Atyati Technologies and Integra Microsystem have already been hired by PSB Alliance as service providers.

PSB Alliance has a capital base of Rs 14 crore and has emerged out of another PSB promoted company Cordex India, database management company which was formed in 2010 to study operational risk in banks. The articles of association of Cordex were modified to include door step banking services on 29 April when it received approval from the registrar of companies as PSB Alliance.

Apart from public sector banks, two private sector lenders IDBI Bank and ICICI Bank were also shareholders in Cordex but will surrender their stake in favour of PSBs.

"This entity is now one promoted by PSBs but all individually hold less than 10 percent. Each PSB has deputy one person as employee of this company right now and we will see how much personnel we need going forward," states Mirakhur.

Bankers said the model provides banks with various benefits as well as cost savings.
In an statement Rajkiran Rai, MD, Union Bank of India stated "It gives us economies of scale, collective bargaining and polling of resources. But most of all it gives us a collective knowledge pool which will help us to benefit from each other's experiences."

Bankers are hoping that by providing few services at homes they can wean away customers from branches which break the chain of infections and set free staff from routine work to focus on revenue earning opportunities.