Cooperative Banks get Core Banking access with the help of NABARD

NABARD, the apex development bank in India, has brought India’s Cooperative Banking sector onto a Core Banking Solution (CBS) platform, giving the country’s rural sector access to basic banking facilities such as Any Branch Banking, NEFT, RTGS and access to ATMs.
A total of 201 state and district level Central Cooperative Banks with 6914 branches from 16 states and three union territories of the country have joined the ‘NABARD initiated Project on CBS in Co-operatives.’ Currently, 200 banks and 6913 branches are on the CBS platform.

The Cooperative consists of a three – tier structure with the Primary Agricultural Credit Societies (PACS) in the villages, the Central Co-operative Banks at the district level (DCCBs) and the State Cooperative Banks at the state level (StCBs). The PACS cover most of the 6.50 Lakh Villages, which are not covered by formal credit institutions, and they mostly cater to the borrowing needs of the small and marginal farmer having land holding of less than five acres.

Out of 201 Banks in the project, 199 were not operating on the CBS platform. These banks were operating either in a manual environment or partially computerized standalone environment leading to the use of multiple technology platforms for their banking needs. This created a heterogeneous environment and decreased efficiency.

In order to drive faster transactions and simplified banking systems and to comply with the regulatory requirements stipulated by the Reserve Bank, NABARD found it imperative to bring all the cooperatives onto a technology platform in a way which would be cost efficient as well as ensure work efficiency.

With CBS, the cooperative banks are now in a position to offer the latest banking products to their customers. For example, salaries of school teachers can now be scheduled to be distributed at the same time thereby increasing efficiency while reducing manual intervention.

By adopting the CBS platform, the co-operative banks have saved substantial amounts of money and are now on par with commercial banks. Even the smaller banks that could not afford to have their own core banking solutions are now able to access the network.

Cooperative banks leverage banking software with a prefixed monthly cost eliminating the need to purchase the banking software or make huge investments for setting up datacenters. Cooperative banks are responsible for the infrastructure facilities within their branches, head office and other service outlets (PCs, printers, branch servers, UPS, LAN, switch, etc.) along with regular maintenance. For the datacenters and disaster recovery centers, NABARD partnered with technology providers including NetApp by deploying NetApp FAS storage systems as a private cloud.

“I cannot stress enough about the importance of the core banking platform to rural cooperative banks and NABARD. Through CBS we have been able to reach out to India’s rural sector and through the deployment of NetApp’s solution in the project, being implemented by leading IT vendors; we have taken a step closer in achieving our goal of financial inclusion in India. We are expecting that implementation of CBS will also help in freeing staff time, allowing them to focus on serving customers better and winning new customers” said Subrata Gupta, Chief General Manager, NABARD.