AEFI RBL Bank aims to be big in Rural & Agriculture Banking Sector

RBL Bank aims to be big in

Rural & Agriculture Banking Sector

Riding on strong growth trajectory, Ratnakar Bank

Limited (RBL) aims to provide holistic services to farmers and
rural customers with Value Chain approach.

BL Bank is one of India's

fastest growing banks serving
over 14 lakh customers
through its 183 branches; and
has delivered a stong growth
performance in FY 1415. One of the
notable factors responsible for the
Bank's growth has been signicant
growth in Priority Sector Lending
Business. The Bank has achieved all its
Priority Sector Lending as well as all sub
sector targets for three years in a row
including FY15. During FY 1415 the
Bank's priority sector lending was seen
at 47.86% as against mandated 40%.
The bank has been honored as Best
Bank Priority Sector Lending (Private
Sector) at Dun & Bradstreet Banking
Awards and as a Global Growth
Company by the World Economic
Forum in 2014. RBL Bank has also been
recognised as India's Fastest Growing

10

ISSUE-5

MidSized Bank for three years in a row

by Business Today KPMG India's Best
Bank Study.
Speaking to Agriculture World,
Manoj Rawat, Head of Agribusiness at
RBL Bank says, Agriculture, Rural
Banking and Financial Inclusion will be
next driver of growth for Indian banking
Industry. An inclusive banking system
has become a top priority to drive
growth in the country and also to
address the two key areas of concern
namely, Financial Inclusion and Food
S e c u r i t y. T h e s e t w o a r e a s a r e
'intertwined' and are set to drive the
next phase of economic growth of the
country which will be alot more
par cipa ve, broad based & inclusive.
1. What are the emerging opportuni
es for banks in Rural India?
A quiet yet sound revolu on is

AGRICULTURE WORLD

MAY 2015

taking place in rural India where

economic growth is not just about
crea ng wealth but also oering huge
opportuni es for banks to service the
nancially excluded. Today Rural
Banking is being seen as a huge
opportunity,with rural nancial services
being one of the fastest growing
segments.
It is being increasingly recognized
that Rural Business, Agriculture
Business, Food Security, Financial
Inclusion and M S M E are serious
business opportuni es which can help
develop a robust Rural Business model.
The basket of products that Rural India
requires will be far more wholesome
than of Urban India. The various
segments which are going to see the
next big growth opportunity include
Agribusiness, MSME, Rural Housing,
Renewable Energy and Services.
2. What is the signicance of
Agriculture in the Indian economy?
Agriculture sector remains the
mainstay of the Indian economy
(although it contributes about 14% of
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RBL Bank aims to be big in Rural & Agriculture Banking Sector AEFI
the na onal Gross Domes c Product
(GDP) as 60% of Indian families are s ll
dependent on agricultural income for
livelihood. India today is the largest
producer of milk, pulses and spices. The
country alsomaintains the largest ca le
herd and covers the largest area under
wheat, rice and co on. While
agriculture share in India's economy has
con nued to decline due to the high
growth rates of the industrial and
services sectors, the agriculture sector's
importance in India's economic and
social wellbeing goes well beyond this
indicator.
3. What is the approach of RBL Bank
to wa rd s A g r i c u l t u re a n d R u ra l
Banking?
Agribusiness credit is the most
cri cal nonland input in agriculture and
has played a pivotal role in increasing
agricultural produc on in India.
Although Agricredit has its own
statutory signicance and generates a
strong goodwill with the Regulator and
Government, at RBL Bank we approach

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this as a huge business opportunity

rather than an obliga on. We believe
Rural & Agriculture business oers huge
business poten al and can generate
sustainable economic value to the Bank,
farmers, customers and our other
stakeholders. At RBL Bank we have
iden ed Agribusiness and Rural
banking as one of the key areas for
growth, and a driver for expansion of
branch networks in SemiUrban and
Rural India.
The Bank adopts a vepronged
approach to increase its relevance in
Rural India
Focus on direct farmer banking
requirements,
Develop innova ve products and
market specic schemes for
farmers and rural customers,
Tap the en re value chainincluding
farmers, ar sans and other players
in the dierent catchments,
Increase outreach through
expansion of ins tu onal network
and use of technology and

2015 MAY

Work with farmers and corporates

to forge both forward and
backward linkages.

4. How have you modelled your

Agriculture business?
The Agribusiness for our bank has
been modelled to address the dierent
target markets in a focussed manner
across the value chain.

AGRICULTURE WORLD

ISSUE-5

11

AEFI RBL Bank aims to be big in Rural & Agriculture Banking Sector

12

Retail Agribusiness:The Bank is

leveraging on the strength of its
exis ng branch network and also
some new branchesthat are being
rolled out, to expand and grow its
Agribusiness por olio. Besides
historical branches, which have
rich Agribusiness poten al, many
new branches have been iden ed
which oer large Agribusiness
poten al in Retail and Commodity
business. Banks oer Smart ATM
cumDebit Card on Rupay Pla orm
to its farmers under Kisan Credit
Card Scheme. Retail Agribusiness
has become one of the major
thrust areas for banks.
Wholesale Agribusiness & Value
Chain Finance: The wholesale
Agribusiness and Value Chain
Finance forms an important
segment of Agribusiness which
addresses the key corporate and
ins tu onal rela onships in
agricultural sector to enable bulk
farmer funding deals. It works with
Sugar factories, Dairies, Planta on
co mp an ies , Agro p ro ces s in g
industries, Agriinput companies
etc.
Commodity Finance and Pledge
Finance: Commodity Finance and
Pledge Finance to farmers against
hypotheca on of agricultural
produce (including warehouse
receipts) has been iden ed as
another segment for growth of
Agribusiness. R B L Bank has
already launched Warehouse
Re c e i pt F i n a n c i n g p ro g ra m ,
wherein credit facili es are being
extended to farmers, processors
and grader sorters, primarily based
on the underlying asset i.e. Agri
commodi es. Our Bank oers
commodity nance for both
perishable and nonperishable
commodi es.
ISSUE-5

R B L Bank has been oering

products to its farmers and rural
customers for Renewable Energy,
MicroIrriga on, Hitech cul va on,
Agriwarehousing and Agrimarke ng
Infrastructure. Ourbank is working with
various innova ve projects namely,
Model villages, Be er Water
Management ini a ves, Improved
Ca le Management program,
Livelihood enhancement projects and
Farm mechaniza on.
5. What is key to deliver agriculture
credit to farmers?
The ow of credit to agriculture has
increased signicantly in the
recen mes. This year the ins tu onal
agriculture target is more than Rs. 8
Lakh Crores.Although the amount of
agricultural credit has increased
substan ally, during the last few years,
the access to formal sources of credit
has been inadequate for small and
marginal farmers (who cons tute for
m o re t h a n 8 0 % o f t h e fa r m i n g
community). Banks have to come up
with innova ve products to address the
credit and banking needs of smaller
farmers. Our bank has a special focus on
small and marginal farmers and has
developed innova ve products which
cater to the needs of these smaller
segments. We are using our Bank's
outreach program and technology
frameworks to address the banking
needs of smaller customers. It has been
our endeavor to oer a comprehensive
suite of short term & long term nancial
products to famers inorder to give them
a wholesome, aordable and ecient
banking experience.
6. What kind of framework is needed
to increase banking outreach to the
last mile in the country?
The Financial Inclusion ini a ves of
the Government and Regulator to
provide access to banking services at all
villages through Branches, Ultra Small
Branches, Mobile Banking, ATM or
Kiosks or Business Correspondents at an
aordable cost is going to change the
banking landscape in India. Banks are
gearing up by upgrading the technology
infrastructure to include core banking
solu ons, mobile and internet banking,
Mobile ATMs, Smart Cards with the
objec ve to reduce the cost of
transac ons, improve customer

AGRICULTURE WORLD

MAY 2015

experience and build a compe

edge for themselves.

ve

However, the sustainable success

o f th e Fin an cial In clu sio n an d
Deepening ini a ves will be achieved
by adop ng an approach wherein all
stakeholders work on this
Commercially viable proposi on &
Value Crea on opportunity rather
than only a Government or Regulator
driven mandate.
For banks the challenges do remain
but the willingness to move from an
o b l i g a t o r y t o o p p o r t u n i t y
approach, from Class to Mass
banking and from Exclusive to
Inclusive strategy will remain key.
Bankswill need to work High Volume
business with technology and
innova onasthe key drivers. The
various ini a ves of the policy makers,
regulator and banks in this direc on
isgoing to transform Rural India and
pave the way to achieve true & las ng
nancial inclusion and would also
contribute to crea ngsustainable food
and nutri onal security for the country.
At RBL Bank we see Rural as the next
big opportunityas wework towards
becoming one of theadmired leaders in
this segment.

Manoj Rawat is Head of

Agribusiness at RBL Bank
Limited (Formerly: The
Ratnakar Bank Limited) and
has more than 20 years
experience in Rural,
Agriculture and Financial
Inclusion.

Manoj Rawat
Head, Agribusiness Group, RBL Bank
Manoj.rawat@rblbank.com
h p://www.rblbank.com
www.krishijagran.com