K. Venkiteswaran

`The State has the best banking network in the country'

KOCHI: Like many other feathers in its cap, Kerala can preen itself in scoring yet another brownie point on the banking front. A traditionally backward district such as Palakkad has become the first to achieve one hundred per cent `financial inclusion' in the country.

This has not happened overnight, but is the fruition of the hard work done over decades to spread the advantages of progress in several fields to its populace.

The latest issue of the Kerala State Industrial Development Corporation (KSIDC), `Infinity' paints a graphic picture of the strides made in the banking sector in Kerala, which has an enviable Credit Deposit ratio of 67.32 and per bank branch population of 8,820. The total number of bank branches in Kerala is 3,225.

Kerala has the best banking network in the country with 3,235 branches of commercial banks for its 3.18 crore population. As on March 2006, per bank population in the State was 8,820 (that is one branch for 8,820 people). If one takes into account the cooperative branch network also, there were only 5,362 persons per branch of bank (commercial and cooperative) in the State.

Kerala's number of ATMs is also a record. The State has close to 1,600 ATMs, which is very high compared to other States.

The State has 48 commercial banks; two regional rural banks, a State cooperative bank, 14 district cooperative banks and 61 urban cooperative banks. The primary service cooperative banks number 1,637 in the State.

There are six Kerala-based banks, led by the State Bank of Travancore. SBT recently crossed a major milestone by crossing the Rs.50,000-crore mark in total business and entering the league of middle-level banks in the country.

The other Kerala-based banks Federal Bank, South Indian Bank, Catholic Syrian Bank, Dhanalakshmi Bank and Lord Krishna Bank are also targeting a major leap in business this year. Federal Bank has bagged the prestigious IBA award for best use of Information Technology in retail banking for two consecutive years. The bank also has the unique distinction as the first traditional bank to network all its branches and attain 100 per cent connectivity. The banks offer almost all new banking products such as Net banking in all their branches. In fact, the robust business practices and steady growth have made Kerala-based banks darlings of the stock market and targets of takeover tycoons.

Kerala accounts for almost half of the remittances made by non-resident Indians. Last financial year, the State received close to Rs.27,000 crores as non-resident deposits.

The share of non- resident deposits in total deposits in the State has been constantly rising over the years from 27.4 per cent during the second half of the 1980s to 35.5 per cent during the first half of the 1990s.And further to 45.1 per cent during the second half of the 1990s.

Most bank branches are connected to the Real Time Gross Settlement (RTGS) mechanism, which allows an account holder to transfer money instantly to any other account, which is connected to the Network. Federal Bank is the first bank in the country to implement RTGS facility in all the branches.

Kerala's credit-deposit ratio had made a quantum leap in the last five years. From 43 per cent in 2001-02, the figure now touches 67.32 per cent. Kerala is slowly, but surely, banking on its creditworthiness, drawing interest from across the board and paying handsome dividends to the investors.