ICICI Bank 2006 Annual Report Download - page 4

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Annual Report 2005-2006
and impacts not only those directly dependent on
agriculture for livelihood but the entire rural
economy, which accounts for over two-thirds of
our people. The social and economic
consequences of this imbalance in our growth
paradigm are serious. At the same time, the
opportunity for unleashing a wave of growth and
prosperity by addressing the needs of the rural
economy is immense. Enhancing access to
financial services is a critical element of the
movement to realise the potential of rural India –
and this is where we at ICICI Bank are seeking to
focus our energies.
Our rural strategy seeks to deliver a
comprehensive range of products and services
to all customer segments in rural India through
appropriate channels, balancing developmental
and commercial considerations. This represents
a complex and challenging task. It requires us to
develop a deep and comprehensive
understanding of rural customers and their varying
needs, overcome barriers of distance and solve
the problem of the high cost-to-serve and high
credit risks associated with traditional banking
models. This is essential for rural banking to be
sustainable.
Over the last few years, we have indeed made
substantial progress in this endeavour. We have
created a suite of innovative credit, savings and
investment and insurance products targeted at the
entire socio-economic spectrum of the rural
population – farmers, traders, entrepreneurs and
other rural households, including those at the
most vulnerable level of the income pyramid. We
have developed new models of outreach in rural
India through a wide range of partnerships with
entities that are vitally interested in rural
development and share our own objectives, such
as companies that depend on agriculture. We have
identified micro-finance institutions as a key mode
of outreach, and are seeking to combine their
social mobilization skills with our financial strength
and expertise. We are indeed moving from
partnering with existing micro-finance institutions
to supporting the development of new entities,
through dedicated training and sponsorship.
Technology is a key element of our rural banking
strategy. Several years ago, we pioneered the
large-scale delivery of technology-enabled
banking services in urban India. We are now
extending this to the rural areas, through internet
kiosks, specially developed ATMs and smart cards
with bio-metric authentication. We are facilitating
the creation of a shared technology platform to
be used by micro-finance institutions, to enable
seamless and low-cost operations.
These initiatives are at various stages, and we have
a long way to go. The challenge before us is to
scale up the implementation of these plans and
make a meaningful difference to the rural
landscape. We will continue to innovate and
evolve, and work in close coordination with policy-
makers, regulators and other enterprises that are
seeking to unleash the potential of the rural
economy. This is the next stage in the growth and
expansion of ICICI Bank, and we hope that we will
be able to fulfil the promise of our initial success.
We look forward to all our stakeholders joining us
on this journey.
N. VAGHUL
Chairman