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e-Finance for Development - An Indian Perspective

e-Finance for Development - An Indian Perspective. Monterrey, Mexico. Agenda. Development Banking in India ICICI - Development framework Sectoral initiatives Legal structure in India Going Forward. Development Banking in India. Priority Sector in India characterised by

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e-Finance for Development - An Indian Perspective

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  1. e-Finance for Development- An Indian Perspective Monterrey, Mexico

  2. Agenda • Development Banking in India • ICICI - Development framework • Sectoral initiatives • Legal structure in India • Going Forward

  3. Development Banking in India • Priority Sector in India characterised by • Low capitalisation and limited assets • Geographical diversity and high mortality • Poor access to capital markets • Non accessibility to credit history • Cash intensity in transactions • Cyclical fund requirement and high commodity risk • Informal sector and uncorporatised • High dependence on Govt. support/ subsidies • Poor financial disclosure on account of tax issues • High risk perception has led to high borrowing costs

  4. Agenda • Development Banking in India • ICICI - Development framework • Sectoral initiatives • Legal structure in India • Going Forward

  5. ICICI Group - Development framework • Product lead approach for each sector • Small and Medium Enterprise (SME) • Agriculture and Micro Finance • Community Banking • Internet and Electronic Banking • Product and delivery technology dependent • Branch remote approach • Central processing centres enable optimum monitoring

  6. Agenda • Development Banking in India • e-initiatives in ICICI Group • Sectoral initiatives • Legal structure in India • Going Forward

  7. SME - Strategic framework • Concerns • Improve Quality • Exit weak accounts • Improve yields • Reprice on RaRoC benchmark • Reduce delivery cost • Web / call centre based delivery • Aspirations • Non capital intensive growth • Liability/ fee income • Cash management product • Innovative delivery • Smart / Credit cards • Web / call centre delivery • Service relationships • Banker for services rather than credit

  8. SME - Service & Delivery Processes all trade related requests for a city • Information • Logging requests • Drop box point • High value cash transactions Call centre Branch Trade finance factory • Handles exceptions • Cross sells • Monitors accounts Processes all pure credit related requests Account/ Relationship manager Customer Credit factory • Provide support backbone for all transaction requests • Services doorstep deliveries • For all transactions except high value cash • Information • Logging requests RPC/CPC ATM Internet “Processing centres*”

  9. Online Products Bill Junction Utility bill payments Pay Seal electronic payment system Corporate Infinity online transfer/ settlement system e-banking in ICICI ICICI Markets online FX, Debt, SME Portal ICICI Direct and ICICI Select Business Multiplier web interface

  10. Agri - Micro-credit initiatives • Innovative structure for micro-credit in rural areas • Overcome the reach problem • Lower administration costs • Channels for delivering micro-credit • Sugar companies • Seed producers • Input companies • NGOs and micro credit institutions These channels help build volumes, reduce costs and monitor credit risk

  11. Agri - Farmer Service Centres (FSCs) • FSC provides one stop solution to the farmer • Agri extension support • Inputs and other services • Credit • Market linkage • Rural infrastructure • These FSCs are promoted by Agri Input suppliers , and avoids duplication of efforts by different players

  12. Input Merchant Store • Credit • Debit • e-purse Farmer Service Center Collect Money Online update of Bank accounts Smart card solution for FSCs Bank Account/ Credit History Output Sale

  13. Smart Cards … An alternative • Difficulty in rural banking • Management of Cash • Cost of idle cash • Cost of cash handling infrastructure • Geographical spreads • Solutions through • Elimination/ reduction of cash handling • Innovation of low cost delivery channels • Smart Card - an ideal vehicle

  14. Smart Cards at ICICI • Smart Cards launched in October 2000 • Infosys Campus in Bangalore • Manipal Academy of Higher Education (MAHE) • New Initiatives • Satyam Smart Card • HPCL Petro Card • Work on multiple application card - Debit, Credit, E-Purse and Loyalty

  15. Social Initiatives - ICICIcommunities • Give Online: On-line donation channel • Retail donors can donate to specific initiatives across India • 100% of donations reach the initiative • Prompt feedback on utilisation of grant • Rs. 11.5 million towards Gujarat Earthquake • Shop the Cause: On-line shopping mall • Over 100 exquisite hand crafted products available • The only facility of its kind available to non-profits in India

  16. Innovations in Delivery Channels • Sustainable Access for Rural India (SARI) project • Partners: MIT Media Labs, Harvard University, IIT-Chennai, I-Gyan, DHAN Foundation, ICICI Ltd • Providing reliable Internet access through Kiosks in rural Madurai using corDECT WiLL • 100 kiosks managed by entrepreneurs to be set-up • Providing e-governance, communication and information services • Possibility of delivering banking services through Internet kiosks being explored

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