“Innovative use of ICT by PSUs for Customer’s
Benefits”
Project
Financial Inclusion@PNB
1
As per Rangarajan Committee Report
Financial Inclusion is the process of ensuring
access to appropriate financial products and
services needed by vulnerable groups such as
weaker sections and low income groups, at an
affordable cost, in a fair and transparent
manner by mainstream institutional players.
2
Important Milestones on Road to Financial
Inclusion in India
1904
Setting up of Rural Cooperatives
1969
Nationalization of 14 major Commercial Banks
1975
Setting up of Regional Rural Banks
1990s
Self Help Group
2005
RBI advised banks to open no frill accounts
2006
RBI allowed BC/BF to act as agents of banks
Sept. 2010
RBI allowed for - profit companies (excluding NBFC) to
act as Business Correspondent
2011
National Payment Corporation of India (NPCI) launched
Interbank Mobile Payment System (IMPS)
3
OUR BELIEF
Banking to the unbanked is a profitable business
MISSION
“Banking for the Unbanked”
VISION
“ To be a leading Global Bank with PAN India
footprints and become a household brand in the
Indo-Gangetic plains, providing entire range of
financial products and services under one roof ”
4
Financial Inclusion Models Adopted by the Bank
Financial
Inclusion
Branch based
Model
(Brick and
Mortar)
Branchless
Model
(ICT Model)
Brick & Mortar Model
-
Opening PNB MITRA-No frill accounts (Zero
balance accounts) with relaxed KYC norms
- Launched PNB Mitra ATM card; withdrawal
limit : upto Rs. 5,000 per day.
ICT (Information & Communication Technology)
Model
– Base Branch acts as a focal point for Business
Correspondents (BCs)
– BCs are engaged by the Bank/technology
providers
– BC Agents (BCAs) contact the customers for
enrollment and issue biometric smart cards.
– BCAs use laptops and POS in Off Line mode.
– Relaxed KYC norms
5
Project FI through RRBs
• Following Srinivasan Committee recommendation, to leverage
technology for business and inclusive growth, the project
CBS@RRB implemented in all the 6 RRBs sponsored by PNB in
April,2010.
• Six RRBs sponsored by PNB:
-
Haryana Gramin Bank ,Rajasthan Gramin Bank, Punjab Gramin Bank
-
Himachal Gramin Bank, Sarva UP Gramin Bank, Madhya Bihar Gramin Bank.
No. of Service Outlets
1488
Avg. no. of Txn. In Lacs (Post CBS) per day
3.07
Customer Base (In Lacs)
87.94
• Project adjudged as the best IT implementation for year 2010 by PC
QUEST Magazine.
• Project was awarded SKOTCH AWARD for the year 2010.
6
FI Products Offered by PNB
• Products offered
– Savings with inbuilt OD
facility upto Rs.2500/• OD facility of Rs. 500/- is
offered upfront
• Proposed new products
– Micro Credit
– Remittances/ Fund
Transfer
– Term Deposit & Recurring
Deposit
– Micro Insurance
– Micro Mutual Fund
Banking transactions
Financial Inclusion
in
Cash withdrawal
Cash deposit
Mini statement
Balance inquiry
Besides Mini
Statement facility,
Passbook facility is
also offered to FI
customer.
7
Customer Enrollment Process
Web Camera for Photograph
Biometric scanner for
Fingerprints
Pad for Signature capturing
Battery Power back-up for
undisrupted enrolment
8
FI Vendor
ENROLLMENT PROCESS
Data conversion
Back Office 3
Back Office n
FINCBS Server at DC
Validation of
Data
External
Firewall
Vendor
Intermediary
server
External
Firewall
FI Intermediary
server
Back Office 1
Back Office 2
Card
personalization
centre
Card distribution
centre
9
Transaction Process
Transaction at the village carried out by BCA with
Hand Held Terminal (HHT)
Machine is used to
capture Transactions
HHT application
supports all products
Secured transaction
With BCA card &
Customer card
Transactions are
Recorded in customer
& BCA card
Bank’s security key
embedded in SAMsmart chip component
of HHT
10
Uniqueness of project FI @PNB
•
•
•
•
•
•
•
PNB has adopted branchless banking model supported with smart card
based technology.
It has independent CBS setup for FI server at data centre with DRS
setup.
The management and control of whole setup is done by PNB team.
Data validation, upload and other activities are performed by exclusive
FI back Offices.
The complete system is secured with symmetric key based Key
Management System( owned and managed by Bank) as per IDRBT open
standards for FI.
Financial transaction happens at HHT only after authentication of BC
agent’s smartcard and customer’s smartcard followed by finger print
authentication.
On completion of any transaction, the HHT prompts transaction
amount and the resultant balance of the customer in local language
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Uniqueness of project FI @PNB
•
•
•
•
•
Contd.
An instant receipt generated from the HHT is given to the
customer
Data transmission is done in encrypted form.
Interoperability is achieved through use of centralized KMS
facilitating the FI customers to avail banking facilities anywhere
within the district/state.
Necessary Information security system and policies including
Firewall system has been put in place for FI project.
FI disaster recovery site has been put in place to meet the
challenge of any failure at Data centre.
12
BCP in FI (Business Continuity Plan):
•Customer Finger print fails to match
• BCA can manually perform the transaction ( override)
Within the customer wise, day wise limit fixed by Bank
It is controlled through the HHT application
New smart card will be issued if the failures are continuous
•HHT is lost before the transaction upload
 Copy of the transactions are stored in BCA card
 Retrieved from the BCA card and uploaded
•HHT is lost and BCA card is also lost
 Second copy of the receipt with the BCA sent to FI back office
 Transaction created in FINCBS
13
BCP in FI (Business Continuity Plan) cont.
•BCA fails to turn up
 Alternate BCA sent to village
 Customer card read and the transaction retrieved
 Uploaded to FINCBS after validation
•Customer card lost
 New card is issued with the data already available with the Bank
•Weekly reconciliation between Bank’s account and BC account.
Cash management
• BC maintains main account with bank
- Provides cash to each BCA within the limit
- Cash held with the BCA is insured for loss and fidelity
-BCA to remit the net amount and the data to Bank atleast once in
48 hours
-HHT application will not permit further transaction without sync with
TSP server
14
Particulars
As on March2011
No Frill accounts opened (lacs)
Amount in Rs.(lacs)
73.33
100342
Out of above
-ICT based accounts ( lacs)
-Under Brick & Mortar model (Branch based) (lacs)
40.89
32.44
Credit Based FI
•Accounts
•Amount (in lacs)
18328
5380.92
No. FI Back Offices
08
No. of FI SOLs
991
FI Technology Providers
10
Total no. of correspondent (NGOs, sec 25 co. FTC & other
bodies)
21
Business Correspondent Agents
2965
Business Facilitators
1633
Farmers’ Training Centers
9
15
Major Financial Inclusion Projects
Projects
Number
States
Projects in Rural Area
28
Bihar, Rajasthan, HP, Uttarakhand, UP,
Punjab, Jharkhand, MP, Orissa, West Bengal
Projects in Urban Area
06
Punjab, Delhi, J&K, Chandigarh, Bihar
NREGA/Social Security
05
AP, Haryana, UP, Chattisgarh
Total ( ICT projects)
39
14 STATES (Indo Gangetic Plain) +
Andhra Pradesh
Project ‘BHAMASHAH’
01
Rajasthan
Credit Driven Projects
( Non ICT )
06
UP, Chhatisgarh, North East, Bihar ,
Karnataka
GRAND TOTAL
46
17 States (14 in Indo Gangetic Plain +
AP, Karnataka and North East)
16
Reach under Financial Inclusion
Particulars
Number of villages with Population > 2000 through
Bank Branches (Brick & Mortar Model)
As on
March 2011
2013
Number of villages with population > 2000 through
BC Model (ICT model)
2186
Number of villages with population < 2000 through
BC Model (ICT model)
3219
No. of NO Frill a/cs opened in 2010-11 in villages
with population over 2000.
10.09 lac
17
PNB’s Jana Mitra Rickshaw Project
Making Rickshaw Pullers Rickshaw Owners
•Launched in Varanasi on Feb 2, 2008 in association with Centre for
Rural Development
•Extended to Agra, Allahabad, Kanpur, Meerut, Lucknow, Patna
•Targets to cover 10000 rickshaw pullers
• 9503 Rickshaws are financed under Rickshaw Projects with outstanding
credit of Rs. 9.88 Crore (as on June 2011)
18
Financing Farmers in Bulandsahar in Collaboration with
Mother Dairy
•ICT Based Financial Inclusion with Credit Driven Project
•Farmers supply milk to Mother Dairy and get fair price
•No dependency on local milk vendors
•Mother Dairy pays back through the accounts (smart card based) on weekly basis
•BC agent makes payment to the farmers through smart card
•Farmers get loan for milch cattle at affordable interest rate
•More than 30000 farmers have been covered under this project
19
Credit Driven FI Projects in PNB
(Data as on June 2011)
• Financing to Farmers in North East through KCC through BC model.
•5439 accounts are opened (tie up with KAKSSUS NGO) with
outstanding credit of Rs. 26.99 crore
• Financing to Self Help Groups in Rajanandgaon through BC model.
• Financing to vegetable growers in Tineri & Punpun (Patna)
•741 accounts are opened with outstanding credit of Rs. 2.42 Crore
•More than 56000 GCCs issued with outstanding credit of Rs. 1.16 crore
•More than 16.53 lac KCCs issued with outstanding credit of
Rs. 134.46 crore
•2322 accounts are opened under Weaver’s Project, Varanasi with
outstanding credit of Rs. 11.61 Crore
•190 accounts are financed to Common Service Centres with outstanding
credit of Rs. 1.95 Crore
20
Capacity Building
Officials of the bank have been trained under the “Train the Trainer”
programme of (Indian Institute of Banking & Finance) IIBF
A. Training to BC agents
•On-locations training programmes are organized for BC agents
•Bank provides training on its products & processes.
•Technology related training is provided by concerned TSP
B. Financial Literacy Counseling Centre (FLCC)
58 FLCCs have been established for spreading Financial Literacy
Rural Libraries have been setup for dissemination of Information in remote
rural areas.
C. 9 Farmer Training Centres (FTCs) have been established under PNB
Farmers Welfare Trust to provide customized training to local farmers.
D. PNB has established 30 Rural Self Employment Training Institute
(RSETI) for organizing employment generation oriented training
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programmes.
The Way Forward
• With the improvement of connectivity,
transaction model to be implemented.
online
• Web based kiosk/ mobile based model to be made
available at villages
• Introduction of combo card (smart chip with magnetic
stripe) to enable payments through ATMs.
• Integration with UIDAI project.
22
Replicability of the project FI@PNB
• The PNB offline FI model can be replicated to offer
doorstep banking services in remote rural areas where
last mile connectivity is still a challenge.
• Credit delivery through smart card model can be
implemented to reach a larger section of the society.
• FI model will help in minimizing the transaction cost.
• This model can be integrated with RSBY, PDS,
payment of social security benefits and wages to the
MGNREGA.
23
Third Party Assessment/Awards
• E-Governance ‘GOLD Award 2010’ under award
category “Innovative use of ICT by PSUs for Customer’s
Benefits” by Government of India.
• Special Technology Award for Financial Inclusion from
IDRBT for the years 2008-09 & 2009-10 respectively.
• SKOTCH AWARD for the year 2010.
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Thanks – TEAM IT PNB
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