Proxy Banking in India

Indian villages were miles away from mutual funds, insurance and even equity trading. Thanks to Internet Kiosk and the ATM duo which has made it possible for rural India. This kiosk has been set up by ICICI Bank in partnership with network n-Logue Communications in remote villages of Southern part of the country. This is known as Proxi Banking. With the help of fibre optic cables, this kiosk works on wireless in local loop technology.

Reasons for setting-up of Proxi Banking

• 58% of rural households still do not have bank accounts.
  
  
• Only 21% of rural households have access to credit from a formal source.
  
  
• 70% of marginal farmers do not have deposit account.
  
  
• 87% households have no formal credit.
  
  
• Only 1% rural househlods rely on a loan from a financial intermediary. · The loans take between 24 to 33 weeks to get sanctioned.
  
  
• Consumers bribe officials to get loans approved which varies between 10 and 20 per cent of the loan amount.
  
  
• Branch banking in rurals is a loss-making.

Benefits to rurals

• Small loans given for buying buffaloes.
• Loans for setting up a tea shop.
• Life and non-life insurance provided.
• Weather insurance given to farmers.
• Insurance policies sold to farmers like groundnut, castor, soya, paddy crop, etc.

The Proxy Banking is an innovative approach to rural lending and will add to the government's expanding base of kisan credit cards and the good old guidelines for agricultural lending.