Bank of Baroda to digitise its lending operations in India
By Edil Corneille
Mumbai-based Bank of Baroda, India’s third largest lender, is set to digitise its lending operations completely including home, agriculture, MSME, personal and auto loans, as reported by The Economic Times. The bank is looking at doing away with paper-based lending, where it has reached out to consultants like McKinsey and Boston Consulting Group for setting up a digital lending department.
“Yes, bank has setup a new vertical at the corporate office – the Digital Lending Department which will have substantial overlap with various credit verticals – Retail, MSME, Agri as well as service verticals like Analytics centre, Risk Management, Marketing,” said Akhil Handa, Head – FinTech, Partnerships and Mobile Banking, Bank of Baroda, as per The Economic Times report. “ The branch led journeys of course would need manual intervention. Ultimately we have to offer the choice to the customers how they would like to engage with us.”
The digital platform will validate and disburse fresh loans. Past loans will be digitised too, to cut costs and improve on profitability. According to the media report, the bank is planning to digitise a large proportion of its retail and MSME processes within the next 6 months.
“Covid has thrown up the need for a fully digital interface where loan validation, pre-approvals, disbursals all happen digitally, this will take a few-months to implement but once active it would help the bank substantially scale up its lending operations,” an official in the know said on the condition of anonymity, as reported by The Economic Times.
The report apprised that the bank has laid out an 18-month action plan aiming to set-up and operationalise the digital lending department within 2 months. A later leg of the plan includes the consolidation of the bank’s ongoing digital initiatives within this new set up, after which the department will be integrated across the systems of Bank of Baroda.
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