Financial Inclusion & Branchless Banking Initiatives - PowerPoint PPT Presentation

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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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Financial Inclusion & Branchless Banking Initiatives

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Financial Inclusion

&

Branchless Banking Initiatives

Using Information Technology for rural outreach


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Agenda

  • Financial Inclusion Survey

  • Branchless Banking Initiatives

  • Financial Literacy

  • Self Employment Training Institute


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Stages of Financial Exclusion

Financial Illiteracy

Financial Discrimination

Financial Exclusion

Financial Exploitation


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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


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Survey Automation

  • Survey Format segregated in to three sections

    • Village Information

    • Family Information

    • Family Members Particulars


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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


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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


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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


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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.


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Technology Initiatives

  • Need for Technology

    • Offers high levels of Security

    • Reduced Transaction Cost

    • Prevents loss or destruction of data

    • Reduces rigidity

    • Increases Efficiency


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Branchless Banking

  • Secure

  • Scalable

  • Reliable

  • Flexible

  • Interoperable

  • Robust & Upgradable

  • Cost Effective


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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Schematic Representation of Transaction Flow

Core Banking Centre

Core Server

GSM/GPRS

WAN

PSTN

Web Server

Firewall

Business Correspondent

Core Branch

Database Server


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Branchless Banking – State-wise Distribution


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Branchless Banking – Business Garnered

Growth of ‘No-Frill’& GCC Accounts

Amt. In lakhs


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Transaction Volumes


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Point of Transaction Terminal

A Point of Transaction

Terminal in Operation

In a village


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New Integrated Terminals


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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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Thank you


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