How Shivalik Mercantile Bank invented Jan Dhan banking

Not many people know that the Jan Dhan (people’s wealth) scheme, the pride of Prime Minister Narendra’s Modi financial inclusion drive, was launched two decades ago by a cooperative bank in Saharanpur, Uttar Pradesh. Their aim was no different from Modi’s: to draw the rural populace into the banking system. While its new incarnation has used shock tactics like demonetisation and Aadhaar with questionable results, the original Jan Dhan has enrolled and benefitted lakhs of rural folk using just the quality of its services as advertisement. [caption id=“attachment_4435767” align=“alignleft” width=“380”] Yashvir Gupta. 101Reporters.[/caption] Back in 1998, India was still coming to terms with the new economic reforms. Industry had seen controls dismantled and was beginning to feel the impact of foreign competition. Banking remained the preserve of the state, although the first private banks, with their marked customer focus, had begun to make their presence felt in the big cities. It made a dynamic engineer, working with Hindustan Aeronautics in Bangalore, wonder why India’s rural poor couldn’t access similar high-quality banking services. When Yashvir Gupta floated the idea of starting a cooperative bank, his family and friends were not amused. 250,000 accounts with his bank today But Gupta, born in the small hamlet of Ambehta in Saharanpur district, was not easily discouraged. He quit his well-paid job and, with the help of some well-wishers, set up Shivalik Mercantile Cooperative Bank on September 5, 1998. The bank initially operated from the garage of his home on Ansari Road and it was here that the idea of Jan Dhan germinated. Gupta’s objective was to help connect poor villagers to banking services and to create awareness about the value of saving. He organised a small team of volunteers who reached out to villagers on Saharanpur’s periphery. The awareness campaign was extraordinarily successful. Since there was no ‘minimum balance’ required, villagers could open an account with just one rupee. Soon hundreds of villagers, who’d never been inside a bank, had become account holders with Shivalik. Once the Ansari Road pilot project began to show results Shivalik took wings and, in 2002, the bank’s first branch opened in Gangoh town. Another followed in Haqiqat Nagar in Saharanpur, above which the bank’s administrative offices were set up. Currently, Shivalik has 25 branches in Uttar Pradesh, including two in Lucknow, and in several states across the country. The Reserve Bank of India (RBI) has certified Shivalik as a multi-state cooperative bank. Shivalik is among the fastest growing banks in Madhya Pradesh, with branches in Indore, Dhar, and Khargaon. In keeping with the times, Shivalik swiftly set up ATMs and cash-deposit machines at all its branches much before other banks did. Today, with over 250,000 account holders, Shivalik is among the most aggressive cooperative banks in the country. The total deposit held by the bank has gone up from Rs 381.98 lakh in 2000 to Rs 916.97 crore in 2017 and the net profit has risen from Rs 3.74 lakh to Rs 10.02 crore between the same period. In 2017, Shivalik Mercantile Bank’s total business was worth Rs 1,467 crore. Staff trained to bank economic last mile Shivalik Bank’s CEO & managing director Suveer Kumar Gupta, too, is an engineer who quit a well-paid job with Tata Consultancy Services to help Yashvir Gupta run banking operations. Suveer says the bank is planning to open branches in Dehradun and Haridwar and one more in Delhi this year. Though a cooperative bank in structure, Shivalik functions on the lines of public and private banks. To serve its poorest customers, those classified by the government as being ‘below the poverty line’ (BPL), the bank has formed 8,000 groups, each with 15-20 women, to which it provides loans without any surety. Suveer said the bank operates 350 micro ATMs, which the staff take to remote villages to open accounts and to provide deposit and withdrawal facilities to account holders. Shivalik Bank’s ATMs never run dry, claims Suveer, pointing out that when banks have remained closed for four or five days in a row due to holidays, Shivalik’s staff have replenished their ATMs with cash. Shivalik Bank prides itself on its staff-selection process, which it describes as “fully transparent” and one that adheres to the norms and guidelines set by the RBI. The bank has over 400 employees, mostly young men and women, trained to cater to the needs of often illiterate, rural customers and to deal with their problems as they arise. According to Suveer, in association with Life Insurance Corporation of India (LIC), Bajaj Allianz, ICICI Lombard, HDFC Insurance and Oriental Insurance, Shivalik also offers a variety of insurance products tailored to his customers’ needs and budgets. Through its banking services, Shivalik has done so much to transform the lives of India’s poor. But chairman Yashvir Gupta believes in doing more direct social and philanthropic work and as far away as possible from the media glare. He has established a girls’ school in his paternal village Ambehta, built a waiting hall at the bus stand for the benefit of travelers and even donated land to the police department to improve security for the local populace. This is just one more way Yashvir has found of returning the peoples’ wealth to the people. (Mahesh Kumar is a Saharanpur-based freelance writer and a member of 101Reporters.com, a pan-India network of grassroots reporters.)