Welcome Chief Secretary to Govt. Presentation on SMART CARD PILOT Department of Rural Development Date18.08.2007
Outline Of The Presentation • Concept • Stake holders • Roles & Responsibilities • Process • Pilot districts • Highlights of the pilot • Present status • Strengths • Costing • Scope of Business • Roadmap • Challenges
Concept. • Disbursement of Social Security Pensions and NREGS wages through Smart Card technology. • Chip based smart card as identity card for disbursement. • Biometric (finger print based) proof of identity arrangement. • Disbursement through a GP level Business correspondent to beneficiaries. • Payment within 4 days of release of amount to bank / financial institution. Continue
Concept. Continued.. • It is a branch less banking model – major step towards financial inclusion. • Enabling the establishment of a last mile banking business correspondent network at each village. • Provides mainstream banking and financial services to the poorest of the poor.
Stakeholders RBI NREGS Wage Seekers & Pensions IDRBT Banking Institutions Rural Development
Roles and responsibilities • Role of Rural Development • Provide information about approved beneficiaries. • Put in place appropriate systems and procedures for transfer of payments. • In Warangal district, bear the cost of the smart card and hand-held / point of sale devises. • 2% service charges of the value of the benefits disbursed in Warangal and Karimnagar districts.
Roles and responsibilities • Role of Banks / FINO • MoU with Government. • Open SB a/c accounts and issue Smart Card to beneficiaries. • Appoint, train and enter into contract with CSPs. • Credit pensions / wages to the account of the beneficiaries. • Provide all required MIS from time to time.
Roles and responsibilities • Role of DRDAs / DWMAs • Supporting enrollment of beneficiaries. • Identification and orientation of VOs as Customer Service Providers (CSP). • Provide copies of Wage / Pension payment orders. • Monitoring and periodical review.
Key-process 1. Enrollment • Department gives list of beneficiaries – SSP & NREGS • Concerned bank / Financial institution conducts an enrolment camp in the village. • GPs, VOs assist the organisation in identification of beneficiaries. • 6/ 10 finger prints, photo and other details of the beneficiary captured. • An account will be opened. Contd..
Key-process Contd.. 2. Preparation and issue Smart Card. • Data collected during enrollment is encrypted on the card including biometric. (Encrypted Java smart card with 32 KB memory). • Card is delivered to the beneficiary in the village within three weeks.
Key-process 3. Business Correspondent & Customer Service Provider (CSP) • Bank / FI appoints a business correspondent. • To deliver service at GP level. • BC correspondent appoints CSP at the village level. • Training to BC/CSP. • Require hardware like Finger print reader, printer, mobile phone etc., is positioned in the village.
Key-process 4. Payment • Government issue instructions to the Banks / FI authorising payment. • List of beneficiaries and authorise amount will be given. • Individual account of beneficiary is credited. • Cash is physically transported and delivered in the village to BC / CSP.
Key-process 5. Disbursement • BC /CSP sits at pre-designated at government premises usually GP building etc., • Beneficiary approaches with card. • Card is inserted in the card reader and identity of beneficiary is established. • Based on the a/c balance of the beneficiary as displayed on the screen, cash is paid. • A receipt is generated in duplicate. • A manual acquittance also maintained. • In case of exigencies, manual payment is made.
Key-process 6. Data uploading • CSP / BC uploads data of disbursements daily. • MIS report an progress of disbursement is submitted to Government.
Pilot districts - Warangal • (6) Mandals in Warangal district with banks. • Dharmasagar S.B.I • Geesukonda Andhra Bank • Station Ghanpur A.P.G.V.B • Raghunathpally U.T.I • Hanumakonda Union Bank of India • Raiparthy S.B.H. • Started in 5 villages on April 30th with pension payment. • Pension payment under taken in all 6 mandals in the month of July 2007. • An agency named Little World is providing technical support and an agency named Zero Mass is providing logistic support to the banks
Pilot districts - Karimnagar. • (2) mandals in Karimnagar district with a private agency M/s Financial Information Network and Operations Ltd., (FINO) • Thimmapur • Sirsilla • Started in 5 GPs on 1st July with pension payment. • Wages under NREGS paid in the entire Thimmapuram mandal on 13th Aug. 2007. • After the pilot, the bank model will be adopted.
Strengths • Un disbursed pensions – breakup • Never turned up for enrollment - 474 • (most likely bogus cases) • Enrolled but (did not turn up) - 810 • may or may not come back. • Total 1284 Saving of Rs.1.89 lakhs after commencement of disbursement through Smart Card Expected savings of Rs.158.00 lakhs per month if up scaled for entire state
Challenges • Up scaling to the entire state. • Budget. • Autonomous certification agency – technology etc., • Availability of vendors. • Cost sharing model. • Sharing between RBI and Government. • Cost sharing by banks. Contd..
Challenges Contd.. • MIS – sending of authenticated reports. • Nodal agency to compile and provide authentic MIS. • Database MIS. • Operational issues. • De duplication. • Enrolment process. • Money evacuation.