ICT Solutions for Financial Inclusion

1
ICT Solutions for Financial Inclusion

• (Experience Sharing by Commercial Banks)
• 17.02.2009
• IDRBT, Hyderabad
• Presented by
• Selvam Veeraraghavan
• General Manager (PS)
• Indian Bank

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 Rural Internet Kiosk Banking for Sugarcane
Farmers 

• Indian Banks First ICT Initiative is
  establishment of Rural Internet Kiosk Centres to
  serve the sugarcane Farmers
• Objective To extend financial and non-financial
  services to sugarcane farmers
• 12 Rural Internet Kiosk Centres in Cuddalore
  District are functioning since April 2005
• In association with M/S EID Parry India Ltd
  (Sugar Mills)
• Bridge between the Bank and Sugar Mills
• Financial Services Assists in the process of
  availing tie-up loans for sugarcane cultivation
  and credit assistance through agri. structured
  products
• Internet Service Provider n-logue Communication
  (P) Ltd. -a transponder in the exhaust chimney of
  their Sugar Mills at Nellikuppam with broad band
  internet connectivity within a radius of 30 Kms
  in and around EID parry Nellikuppam sugar
  factory
• Non-Financial Services (Agri. / Education
• eg. Exam results , courses offered, Health
• Websites used
• India Agriline hosted by M/s EID Parry Ltd.
• Indian Development gateway. Govt. of India
• ATM cards are issued to Sugarcane Farmers.

3
  Financial Inclusion through Digital inclusion
 

• Indian Bank Pioneer in introducing Financial
  Inclusion in India (2005)
• National Pilot Project on Financial Inclusion
  (NPPFI) in the country i.e. Union Territory of
  Puducherry during December 2005.
• 100 coverage in UT of Puducherry and Cuddalore
  Dt. of TN (Banks Lead Districts with
  cooperation of all Bankers.
• Banks other Lead Districts 100 coverage in
  IB Branches.
• Objective To cover the unbanked masses with
  limited branch network and manpower, leveraging
  technology is pivotal.
• Rural Mobile Teller Software developed by Bank
  in association with TCS for opening of No frills
  a/cs in the field to and upload to CBS.
• Staff team from the Bank visited the villages
  along with Lap Top, Web Cam and no frill
  accounts opened on conduct of door-door survey.
• 15 Lakh number of Savings Bank - No F rills
  accounts in rural /SU/Urban/Metro areas across
  India.
• More than 50,000 people benefited under SB OD and
  GCC

4
Biometric Smart Card Banking (offline)

• Objective Increasing outreach under FI
• and Doorstep Banking
• -------------------------------------------
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• Pilot Project with M/s FINO, Mumbai (Financial
  Information and Operations Pvt. Ltd.)
• 1 year pilot project
• 2800 plus cards have been issued
• 3 locations
• (Virudachlam (TN) Rural,
• Dharavi (Mumbai) Metro, Kaligram (Rural)
• Smart Card operates in offline mode
• Cards act as customer identify tokens
  e-passbook / Biometric ( Finger print
  authentication) POT (Point of Transaction)
• Integration with CBS
• Uploaded through PSTN Line ( Telephone line)
• Banks Mobile Banking Operator (MBO) transactions
  at the Doorsteps of customers covering a cluster
  of villages with a weekly visit schedule.
• Learnings Offline issues, Third Party Server
  , No ATM compatibility No Voice Guidance and No
  joint authentication for SHGs in FINO project
  This led to online Smartcard Banking in AP for
  implementation of Social Welfare Schemes.

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Banking Service Centres - BSC (Kiosk Banking)

• OBJECTIVE
• To cover the vast sections of unbanked masses by
  leveraging Technology (Internet Facility ).
• People need need not visit the branches from
  their far off villages, even for simple banking
  transactions, forgoing their daily wages,
  spending for travel expenses and sparing their
  valuable man hours. To serve the rural masses in
  this regard, the Bank has introduced a new
  banking delivery channel viz. Banking Service
  Centre (BSC).
• PROJECT Internet Banking module developed by
  the Bank is adopted in association with TCS is
  put in place.
• Pilot Project with RBI permission.
• 20 Banking Service Centres - functioning since
  March 2008 across India. Tamil Nadu 10,
  Puducherry 1, AP 4, Kerala -1, Karnataka 1,
  Maharashtra(Pune) 1, Gujarat (Piplag Ahmedabad)
  -1 , Orissa (Bhubaneshwar-1)
• Financial Services rendered Cash receipts /
  Cash payments
• Balance enquiry / Transfer Transactions
• BSC operator (Banks Clerk / Officer
• (in case of exigency)
• Account are mapped
• transaction limit is Rs.10,000/- per day
• per customer.

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BSC Contd

• Non-Financial Services
• Non- Financial Services Offered Information in
  the field of Agri. (Agro technology) Weather for
  cast, Commodity Price Movements, Health Education
  )
• Financial Literacy and non financial services
  through digital content
• Websites used . www. Indg.in India Dev. Gateway
  - Rural website hosted by Ministry of Information
  Tech. and Communication for 5 Rural domains
  (Rural Health, Education, Agriculture (including
  Bank Loan schemes), Energy and e-governance.
• 100 achievement under Financial inclusion in
  the command area of BSC will be achieved.
• Filed Level Issues
• Connectivity issues( BSNL, Vodafone, Reliance
  and Tata Indicom)
• Power , Conveyance , Manpower etc.

7
Biometric Smart Card Banking (Online)

• Objective Social welfare schemes through Smart
  Card Banking
• Disbursement of old age pension
• wages under National Rural Employment Generation
  Programme (NREGP)
• Project
• in association with Government of Andhra Pradesh
•   Customer Service Points (CSP) and BC Model
• Through Biometric enabled Smart Cards and hand
  held devices
• Online Card - RFID Card Voice Guidance
  enabled.
• Service Provider M/s Integra Bangalore
  (selected through RFP)
• Project area Six districts namely Chittoor (our
  Lead Dist.), Medak, Karim Nagar, Mahabubnagar,
  Warangal and East Godavari.
• About 2,00,000 people are expected to be
  benefited.
• Project implemented shortly.

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 MICROSATE BRANCHES 

• Microfinance is a powerful tool
• for Financial Inclusion.
• Banks Microfinance
• 1.44 lakh Self Help Groups
• Loan outstanding of Rs.1,230.02 crores.
• The first exclusive
• Microfinance Branch named
• Microsate Branch was
• opened by the bank in the country during May 2005
  at Chetput, Chennai.
• In a short span of three years, the branch could
  cover poor families in 1400 urban slums in the
  city, touching the lives of more than one lakh
  poor households. The phenomenal outreach through
  the branch paved the way for the bank to
  establish 13 more Microsate branches during
  2007-08 in major cities in India. So far, 136.14
  crores has been disbursed to more than 13,459
  women SHGs / JLGs through these branches.
• It is further proposed to establish 13 more
  Microsate Branches in Tier II cities / towns in
  South India. (9 in Tamilnadu, 3 in Andhra Pradesh
  and one in UT of Pudhucherry) during the current
  fiscal. The Bank will have totally 27 such
  branches before the close of this year.
• Biometric ATM to Microsate Branches

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 Biometric ATM 

• Indian Banks latest Technological Development
  is Dual Biometric Authentication of Biometric
  ATM ( from ATM to BTM) Solution
• Objective s To serve SHGs , Farmers and Rural
  Customers
• With the sprawling development of SHG movement,
• To relive the branches from the massive
  customer
• withdrawls to Cash counters
• 11 Biometric ATMs installed, so far
• Technology Solution developed by the Bank is
  association with FSS (Financial Softwares and
  Systems Pvt. Ltd.)
• Benefits
• Joint authentication enabled for the benefit of
  SHG members.
• 24 X 7 services
• No need to remember the PIN
• No chances of misuse of the PIN as Biometric
  authentication enabled.
• More useful for the illiterate masses.
• Plans to install in 100 rural / SHG centric
  Branches and to covert regular ATMs to BTMs

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 Other ICT Initiatives  

• Onliine Commodity Price Tickers with NCDEX
  (National Commodity and Derivatives Exchange
  Ltd.) Price Tickers Boards at Anakapalli and
  Guntur Branches in AP
• Bank uses alternative delivery Channels
• Microfinance, BF/BC , Biometric ATM, Smart Card
  Banking, Kiosk Banking etc.
• 27 BFs are presently deployed.
• BC model in AP
• Future Plans Upscaling of Technological
  Projects (AP Smart Card Project)
• New Projects ADM (Automatic Cash Deposit
  Machines ) to help small Depositors (SHGs),
  Mobile Banking Under Financial Inclusion etc.

11
 Capacity Building  

• Capacity Building and Training for Bank
  Customers, SHGs, Entrepreneurs BF/BCs
• In collaboration with fellow bankers
• RTC (Rural Training Centre) at Karaikudi,
  (IOB,and NABARD)
• APBIRED (Andhra Pradesh Bankers Institute for
  Rural and Enterpreneuership Development) 5 Banks
  (IB,CB,IOB,SBH,AB) and AP Govt., NABARD
• Indian Banks Individual Initiatives
• I.FLCC (Financial Literacy and Credit Counselling
  Centre)
• At Dharmapuri for savings, investments, credit
  and credit restructuring needs of the customers.
  
• VRS retirees (Rs.7000/- to Rs.10000/p.m
  Honorarium for FLCC counsellors)
• Role of Counsellors Financial Literacy, Credit
  Counselling Debt Management and Restructuring.
• II. INDSETI
• Self employment training institutes in the name
  and style of INDSETI in Salem and Puducherry will
  be opened shortly.

12
Development in NE Region

• Indian Bank has 28 branches in NE region (6
  States- Assam, Meghalaya, Tripura, Nagaland ,
  Itanagar Sikkim) of which, Rural 7, SU 11.
• Priority Sector advances is 48 to total advances
  (RBI directive 40)
• Total SHGs 574, Credit Linked 436, Amount of
  Credit Rs. 374.25 lakhs.
• Financial Inclusion 6146 No frills A/cs
• ATMs - 8 (6 States)
• Biometric ATM (newly proposed) 1 (Assam)
• Business Facilitators Working 2 (Assam)
• Farmers clubs Functioning in Assam- 5
• Village Adoption Scheme 3 villages in Assam

13
  Standardization of ICT for Financial Inclusion

• Issues and Challenges The issues and challenges
  for the bankers in selecting and adopting
  appropriate technology delivery channels and
  utilizing the services of suitable service
  provider with proper security and scalability
  arrangements include the following
• Multiple vendors and technologies involved
• Changing Technology trends
• Vendor selection and valuation of vendor
• Standards / Specifications prescribed to be
  followed by the service providers
• Negotiation and Fixation of Commercials
• Proper data storage and retrieval framework
• Operation through third party switches
• Standardization of Legal network
• - Service Level Agreements/ Price Unit /
  Common repository of KYC.
• Contd

14
  Standardization of ICT for Financial Inclusion
(contd.)

• Uniformity in systems and procedures
• Customization Training
• Infrastructure Hardware / Software support
• Development of Interface programmes
• Selection of suitable connectivity options
• Requirement of Piloting for every solution
• After service facilities / Annual Maintenance
  Contracts
• Customer friendliness and easiness to handle
• Personnel (outsourcing eg. Business
  Correspondents)
• IT Protocols
• Information and networking security measures
• Need for sharing common platform (i.e. Common
  Server) Convergence.
• Interoperability.
• Up-gradation of Technology
• Scalability Robustness
• ATM / Biometric ATM Compatibility etc.

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Thank You

• In the cause of inclusive banking by leveraging
  technology
• Let us
• LEARN FROM YESTERDAY
• LIVE FOR TODAY
• HOPE FOR TOMMORROW

Quote ALBERT ENSTEIN