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Financial Inclusion & Branchless Banking Initiatives

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Financial Inclusion & Branchless Banking Initiatives Using Information Technology for rural outreach Agenda Financial Inclusion Survey Branchless Banking Initiatives Financial Literacy Self Employment Training Institute

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Presentation Transcript
slide1

Financial Inclusion

&

Branchless Banking Initiatives

Using Information Technology for rural outreach

agenda
Agenda
  • Financial Inclusion Survey
  • Branchless Banking Initiatives
  • Financial Literacy
  • Self Employment Training Institute
slide3

Stages of Financial Exclusion

Financial Illiteracy

Financial Discrimination

Financial Exclusion

Financial Exploitation

financial inclusion survey need
Financial Inclusion Survey - Need
  • Need for I T Support
    • Branches to open large number of small value accounts
    • Facility for the branches to upload the data
    • Exception Reports when the balance exceeds or the
    • turnover exceeds the parameterised amount
    • Survey details directly generates an uploadable file
    • All accounts maintained in the Bank’s Server
survey automation
Survey Automation
  • Survey Format segregated in to three sections
      • Village Information
      • Family Information
      • Family Members Particulars
survey automation6
Survey Automation
  • Village Information:
    • Each Village linked to a particular Branch
    • Each Branch can be linked to multiple Villages
    • Village Profile to be captured once
      • Number of Households
      • Availability of Infrastructure
survey automation7
Survey Automation

Family Information:

  • Generates a Unique Number for Each Family
  • Facilitates capture of photograph of the family members
  • Enables capture of information such as
    • Religion
    • Caste
    • Extent of Land Owned
    • Assets Owned
advantages of survey automation
Advantages of Survey Automation
  • Data Capture can be either Online or Offline
  • Enables creation of Database of all households
  • Provides the ability to Query the database
  • Prevents Loss/ Destruction of Information
  • Facilitates Consolidation of Data
  • Can be a Single Point of Reference
  • Enables access of Information from anywhere
slide9

Bank’s Performance under Financial Inclusion

  • 337 Branches included.
  • 1459 Villages covered
  • 4,31,655 House holds surveyed.
  • 2,35,774 People identified to open no-frill SB account.
  • 4,26,711 No frill SB accounts opened.
  • 26938 Persons identified for issue of GCC
  • 19463 Cards have been issued.
technology initiatives
Technology Initiatives
  • Need for Technology
      • Offers high levels of Security
      • Reduced Transaction Cost
      • Prevents loss or destruction of data
      • Reduces rigidity
      • Increases Efficiency
branchless banking
Branchless Banking
  • Secure
  • Scalable
  • Reliable
  • Flexible
  • Interoperable
  • Robust & Upgradable
  • Cost Effective
branchless banking12
Branchless Banking
  • Service provided at their doorstep/ village
  • Availability of Basic Banking Services throughout the day
  • Hassle free for the villagers as there are no challans/vouchers
  • Familiarity in dealing with their own person
  • Reduces the cost of transaction
  • Ability to handle large volumes with less staff
  • Reduces the pressure on the counters at rural branches
branchless banking13
Branchless Banking
  • Types of Technology Used
    • Card Based Device
    • Support for Fingerprint Authentication
    • Redundant Power Sources for continuous operation
    • Mobile and easy to carry
    • Voice Guidance in Local Language
    • Support for multiple communication Channels
    • Device should store minimal data
    • Ability to support multiple products and services
    • Receipt printing
    • Scalable
products services offered
Products & Services Offered
  • Cash Deposits
  • Cash Withdrawals
  • Balance Enquiry
  • Mini Statement
  • Transfer of Funds between Own Account
  • Loan Repayments
  • Loan Withdrawals in Running Accounts (GCC)
  • Self Help Group Accounts (SB and Loan Accounts)
  • Recurring Deposits
  • Milk Payments
  • National Rural Employment Guarantee Payouts
  • Social Security Pension Payments
products services in the offing
Products & Services in the offing

Products Under Development

  • Person to Person (P2P) Remittance Facilities using mobile
  • JanaShree Bima Yojana Premia Collection
  • Utility Bill Payments
  • Pre-paid Mobile Recharge
  • Remittance from One Card to another Card
branchless banking16
Branchless Banking
  • Risk Mitigation
    • Two Factor Authentication (Presence of Card & Fingerprint)
    • Per Day Transaction Limit
    • Customer Per Day Limit for Withdrawals and Receipts
    • Number of Transactions
    • Business Correspondent Per Day Limit
    • Total Transactions by the Business Correspondent for a Day
    • Interval between Two Day Ends
    • Branches also provided a Terminal to transact
    • Customer Receipt using an Impact Printer
    • Web Access to monitor the Card Balances and BC Balances
    • Forces On-line transactions when there is a balance mismatch
branchless banking17
Branchless Banking
  • Risk Mitigation – Contd..
    • A Banner provided at BC location
    • A poster containing the instructions provided at BC Locations
    • Branches provided with a similar terminal to handle emergencies
    • Cash Box provided to the BC for safe keeping of cash
    • Imprest Cash provided to the BC for handling payments
    • BC insured for the Cash at BC location
branchless banking18
Branchless Banking
  • Nature of Transaction
    • Offline
    • Online when it is a foreign Card or
      • when there is a balance mismatch
  • Customer Deliverables
    • Printed Receipt using an Impact Printer
    • Print out in local language would be provided
  • Providing GPS for greater comfort
branchless banking19
Branchless Banking
  • Data Storage Policies
    • Account Information only with the Bank
    • Transaction Data only routed by the Technology Service Provider
    • Periodic Reconciliation process to tally
    • the balances
branchless banking20
Branchless Banking
  • Minimum Standards for identifying and engaging a BC
  • Methodology and Standards for Data Storage on Cards
  • Finger print Storage and Retrieval Standards
  • Risk Mitigation Criteria
  • Card Numbering Standards
branchless banking21
Branchless Banking
  • Technology Framework should define
    • Policy Framework (Card Issuance, BC, Service Delivery)
    • Legal and Statutory Framework
    • Security Framework
    • Transaction Processing Framework
    • Should facilitate Convergence
business initiatives
Business Initiatives
  • Financial Inclusion should not be a regulatory directive but a viable business proposition
  • Facilitates to extend the outreach
  • Reduces the cost of delivery
  • Effective credit delivery system
  • Ability to offer new products and services
  • Linkage to an economic activity or income generation activity
  • Easier Implementation at fractional cost of the branch
slide23

Schematic Representation of Transaction Flow

Core Banking Centre

Core Server

GSM/GPRS

WAN

PSTN

Web Server

Firewall

Business Correspondent

Core Branch

Database Server

branchless banking business garnered
Branchless Banking – Business Garnered

Growth of ‘No-Frill’& GCC Accounts

Amt. In lakhs

point of transaction terminal
Point of Transaction Terminal

A Point of Transaction

Terminal in Operation

In a village

financial literacy
Financial Literacy
  • Bank has lead responsibilities in three districts
  • Chikmagalur Kodagu Grameena Bank (CHIKO Bank) is the RRB sponsored by the Bank
  • All branches of the RRB are automated. Steps initiated for Core Banking Solution
  • Set up Financial Literacy and Credit Counseling Centre in Chikmagalur
  • Established COBSETI (Self Employment Training Institute) in March 1996 at Chikmagalur. Training provided for Skill development, Skill upgradation and agriculture related activities
  • Awaiting land allocation for setting up a similar institute at Kushalnagar in Kodagu District; Presently being handled at the Lead Bank Office at Madikeri
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