After auto and IT, the banking industry is now going small.
Private sector major Bank of Baroda recently rolled out nano branches - a rent-free model where just two people will provide basic banking facilities in remote areas.
The bank has already launched around 1,700 such branches in Gujarat, Rajasthan and UP and plans to set up another 1,000 in the current fiscal year.
"These ultra-small branches are play crucial role in instilling trust in the people in the un- banked areas because they will see a permanent physical structure having the bank's name," said Kishor Kharat, general manager, Bank of Baroda.
Bank will not have to spend on the rental of the branch areas as the space (of around 100-200 square feet) will be provided free of cost by the Gram Panchayat or the local community centre.
According to the estimates, while the per transaction cost for banks normally comes around R40-60, it is very low in the case of nano branches.
These small branches are linked to the nearest big branch and function once in a week. A business correspondent and an employee (the manager or senior manager) of from the nearest branch will visit the branch.
"The officer will clear the loan approval and will also provide advisory services to customers," said Kharat. "Basic banking facilities such as withdrawal and deposit, balance enquiry, statement of account will be provided from these branches."
The branches will have a point-of-sale machine, passbook printer and laptop to carry out necessary banking services.