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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

Using Information Technology for rural outreach

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

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

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

Schematic Representation of Transaction Flow

Core Banking Centre

Core Server




Web Server


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