Banking is an essential service; allow vaccinations for bankers on priority

ICICI Bank on Thursday said it is "much better" prepared to restrict the impact of the second coronavirus wave on its operations because of last year's experience but appealed for banks' employees to be allowed to take vaccinations on a priority basis as they are rendering an essential service. The second largest lender warned that if banking services were to fail, it can have an adverse impact on the economic activity, and hence it is pertinent for ensuring that at least the branch staff is allowed to take vaccinations.

The comments come at a time when localised lockdowns are being announced across many pockets of the country in view of the rising COVID infections, which are breaching the 3 lakh mark daily and also resulting in over 2,000 officially counted deaths.

"We are an essential services... we are all exposed (to customers). We don't have the luxury. But we are not allowed vaccinations, not allowed to board trains, not allowed to board buses. So, what kind of essential services we are? More push should be there," its executive director Anup Bagchi told reporters.

He warned that if banking operations get affected, we may have to face an economic crisis as well after the ongoing health crisis, and cited the case of a single automated teller machine shutting down for seven days to illustrate his point.

There is a case for "higher sensitivity" when classifying essential services, Bagchi said, stressing that there are other essential services also and bankers exposed to customers in branches should be allowed to vaccinate because they are exposed to walking-in customers.

Starting May 1, the central government has allowed every adult the chance to get vaccinated. However, concerns are being raised about the efficacy of such a move because of lack of vaccine stocks.

Meanwhile, Bagchi said the bank is much better prepared to take on the second wave of the pandemic because it had a system in place to take care of the disruptions coming because of the lockdowns as compared to last year's experience, where it had to overhaul things.

Bagchi said an end-to-end digital journey where there is no need for a physical touch at all is essential while extending banking services and after the announcement of the national lockdown last year, it had to work on ensuring the same.

Further to the same, the bank on Thursday launched a 'merchant stack' which will help deliver seamless banking services, including a zero-balance current account, instant credit, a digital store management, a loyalty programme and other value added services to the 2 crore merchants nationally.

Bagchi compared the new services akin to a master switch where the customers will not be forced to come to the bank repeatedly for newer services, and added that the bank has put in place a refined data analytics back-end which will take care of loan decisions based on dynamic data points such as the transactions happening at the merchant's end, inventory before giving the working capital credit of over 6 months.

From a risk perspective, Bagchi said the bank has built a strong portfolio in the business banking side, where its ability to make use of the data it possesses has ensured that the credit costs are less than 1 per cent as against double-digit figures for some lenders.

Declining to give a target of the number of customer relationships they are looking at, Bagchi said the fintechs cannot offer an end-to-end service like banks can.

For ICICI Bank, revenues from the stack can flow from fees, interest on credit offtake, float on balances in the accounts and merchant discount rate, he said.