ICICI prepares fresh products for rural areas

The bank to offer bank accounts, subsidy transfers and basic insurance for farm produce in the next six months.

ICICI Bank Ltd., India’s largest private sector by assets, is getting ready to roll out a variety of financial products for villagers and farmers in rural India, said managing director and chief executive, Chanda Kochhar.

From basic bank accounts to subsidy transfers to basic insurance for farm produce, the bank expects to offer these products in the next six months, she said in a recent conversation with India Real Time.

The bank currently offers a basic bank account—known as a no-frills account—in 18 states and has three million such account holders. These provide it with a ready market in which to sell some of these new products.

The concept of a no-frills account was first suggested by the Reserve Bank of India in 2005, when it directed all banks to offer this option of a basic account to villagers. Most banks did the bare minimum on that—even today less than half of all Indians have a bank account.

Last year, the RBI asked all banks to submit a plan for the inclusion of more Indians into the formal financial system that was approved by their boards. This, said RBI governor D. Subbarao, in a speech at the spring meeting of the International Institute of Finance in New Delhi earlier this week, would create a sense of ownership of the problem among banks.

ICICI, which is listed in New York, says it is readying this rural push ahead of others.

View the full story in the Wall Street Journal.