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ICT Solutions for Financial Inclusion

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ICT Solutions for Financial Inclusion

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    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

    2.   Rural Internet Kiosk Banking for Sugarcane Farmers   Indian Bank’s 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 (Bank’s Lead Districts – with cooperation of all Bankers. Bank’s 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 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 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) Bank’s 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.

    5. 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 (Bank’s Clerk / Officer (in case of exigency) Account are mapped; transaction limit is Rs.10,000/- per day per customer.

    6. 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. 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. Biometric Smart Card Banking (Online)

    8.   MICROSATE BRANCHES   Microfinance is a powerful tool for Financial Inclusion. Bank’s 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

    9.   Biometric ATM   Indian Bank’s 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

    10.   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 Bank’s 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.

    15. Thank You In the cause of inclusive banking by leveraging technology Let us LEARN FROM YESTERDAY LIVE FOR TODAY HOPE FOR TOMMORROW

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