RBI_CAB_portal_07072011

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Financial Inclusion
&
Branchless Banking Initiatives
Using Information Technology for rural outreach
1
Contents
 Branchless Banking – Corporation Bank’s Business Model
 Technology Framework
 Way Forward
2
Branchless Banking Model
 Corporation Bank initiated the process of Financial Inclusion in June
2006 to reach out to the rural population who were hitherto not having
Bank accounts
 The Bank adopted the Branchless Banking model with the help of
technology to handle the transactions
 RBI Guidelines on engagement of Business Correspondents enabled
the rural branches to reach out to the remote villages
 Typically it involves the ability to handle high volume of low value
transactions
 Provide basic banking services at the doorsteps of the villagers
3
Branchless Banking Model – Financial Inclusion Survey
Financial Inclusion – Survey
Survey formed the basis for identification of the financially excluded
Survey Format segregated into three sections
 Village Information
 Family Information
 Family Members Particulars
4
Branchless Banking Model – Financial Inclusion Survey
Survey Methodology
 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 in the village
 Availability of Infrastructure like Post Office,
Hospital, Veterinary Clinic, Schools etc.
5
Branchless Banking Model – Financial Inclusion Survey
Family Members Information:
 Links all Family Members to the unique family number
 Enables capture of information such as
 Religion
 Caste
 Extent of Land Owned
 Assets Owned
Enables capture of Bank Account details
 Facilitates entry of other information such as
 Willingness to open an account
 Loans with money lenders
 Insurance / Other details
 Interested Activities
 Ensures capture of other details
6
Branchless Banking Through Business Correspondents
 The Bank has availed BC services from:
 Individuals
- Should hail from the same village
- Minimum Qualification – 7th Standard Pass
- Preferably SHG Members
 Section 25 Companies under Companies Act
- Similar Criteria as above
- Branch Manager assists in identifying the correct person
 Trusts
• The RBI Working Group has recently recommended additional entities who
can be engaged as Business Correspondents and now it was announced that
Individuals would be permitted as BCs. This would facilitate Banks to reach
out to more villages
7
Branchless Banking – Methodology Adopted
• The Bank adopted one Business Correspondent for one village
model who is available throughout the day for the villagers to
transact business
• Individual Accounts are opened in the Core Banking server at
the respective branches
• Account Information only with the Bank
• Transactions alone are routed through the Technology Service
Provider
8
Branchless Banking Through Business Correspondents
Utility
• Service provided at their doorstep/ village
- Saves on the commuting time and transportation cost
• Availability of Basic Banking Services throughout the day
- The BC is a permanent resident of the village and hails from the same village
and hence can assist customers at any time of the day
• Hassle free for the villagers as there are no challans/vouchers
- User-friendly and no need to write or fill-up cheques
• 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 / semi-urban branches
9
Branchless Banking - Technology
 Different Technologies were evaluated and tested by the Bank to
ensure that it
• Offers High levels of Security
• Reduces Transaction Cost
• Prevents loss or destruction of data
• Ensures User friendliness
• Increases Efficiency
• Enables Cross Selling of products and services
10
Branchless Banking - Technology
• Secure
- Two factor authentication card and Biometric Authentication
• Scalable
- Can handle multiple products & services
• Reliable
- Transactions are secure and ensures non-repudiation
• Flexible
- Supports on-line and off-line transactions
• Interoperable
- Customers can use Branch/alternate BC in case of need
• Robust & Upgradable
- Ability to support Contactless, Contact and Magnetic Stripe Cards
• Cost Effective
11
Branchless Banking - Technology
Type of Technology Used
 Card Based Point of Transaction Terminal
 Smart/ Radio Frequency Identification (RFID) Cards used
 Supports Fingerprint Authentication
 Alternate Power Sources for continuous operation
 Mobile and easy to carry
 Voice Guidance in Local Language
 Support for multiple communication Channels
 Device stores minimal data
 Ability to support multiple products and services
 Receipt printing using Impact Printers
 Scalable
 Supports off-line and on-line transactions
12
Branchless Banking – Services Offered












Cash Deposits
Cash Withdrawals
Balance Enquiry
Mini Statement
Transfer of Funds between Own Accounts
Loan Repayments
Loan Withdrawals in Running Accounts (GCC)
Self Help Group Accounts (SB and Loan Accounts)
Recurring Deposits
Payments to Milk Pourers of dairy co-operatives
National Rural Employment Guarantee Payouts
Social Security Pension Payments
13
Branchless Banking – Services Offered
Products in the Offing:
 Person to Person (P2P) Remittance Facilities using mobile
 Branchless Banking using Mobile Phones
 JanaShree Bima Yojana Premia Collection
 Utility Bill Payments
 Pre-paid Mobile Recharge
 Remittance from One Card to another Card
14
Branchless Banking – Present Position- State-wise Distribution
Sl
Name of the State
Villages
Branches
01
Karnataka
858
171
02
Andhra Pradesh
1057
47
03
Tamil Nadu
326
80
04
Kerala
56
32
05
Goa
27
15
06
Gujarat
92
18
07
Maharashtra
18
07
08
Haryana
22
09
09
Punjab
13
06
10
Delhi
09
04
11
Madhya Pradesh
11
03
12
Orissa
01
01
13
Uttar Pradesh
02
02
14
West Bengal
08
04
2500
399
Total
15
Branchless Banking – Accounts Opened
Growth of ‘No-Frill’& GCC Accounts
Amt. In lakhs
Type of
Account
31.03.2009
31.03.2010
31.03.2011
Accounts
Amount
Accounts
Amount
Accounts
Amount
CPSB
447863
1767.22
547228
2655.04
1260439
3943.65
CGCC
19779
2344.50
21497
2672.25
23323
3022.65
16
Branchless Banking – Transactions Handled
Transaction Growth
[Amount in lakhs of Rs.]
Month
Cr.
Tran
Credit Amt
Db.
Tran
Debit Amount
Tot.
Tran
Total Amount
Mar – 08
1034
2.99
368
2.79
1402
5.78
Mar – 09
4653
7.67
5238
26.00
9891
33.67
Mar – 10
12221
12.51
7404
25.46
19625
37.97
Mar –11
8542
10.38
27459
104.52
36091
114.90
17
Branchless Banking – Villages with Population > 2000
Sl. No.
Name of the State
No. of Locations Branches
Allotted
Present
B.C. Model
01
Karnataka
124
03
121
02
Andhra Pradesh
66
05
61
03
Tamil Nadu
97
05
92
04
Kerala
04
0
04
05
Uttar Pradesh
01
0
01
06
Haryana
10
0
10
07
Punjab
02
0
02
08
Chattisgarh
11
0
11
09
Maharashtra
03
0
03
10
Gujarat
08
0
08
11
Delhi
03
0
03
12
Madhya Pradesh
04
0
04
13
Sikkim
01
0
01
T OTAL
334
13
321
18
Branchless Banking – Our Business Model
 Branchless Banking is an alternate Delivery Channel for providing basic
banking services at an affordable cost
 Financial Inclusion is not a Social Obligation or a Regulatory Directive but
viewed as a viable business proposition and a commercial initiative
 The cost per transaction through this model would be a fraction of the cost of a
transaction incurred at a branch
 Facilitates in extending the outreach and provides the ability to offer new
products and services
 The model chosen by the Bank is not limited in scope and restrictive in use but
provides the capability to support livelihood programs to add economic value
19
Branchless Banking – Way Forward
• To cover 4000 villages by March 2012 and 6000 villages by March,
2013
• Increase the card population and Provide multiple products on the Card
• Extend incentives to Business Correspondents for canvassing accounts
• Scout for Cash based activities in the village and route them through
cards
• To cover 200 locations under Urban Financial Inclusion by March 2012
• To implement EBT payment in 900 locations by March 2012 and 1000
locations by March 2013
20
Branchless Banking – Way Forward
• Expanding the footprint in all the existing Service Area Villages
of the Bank
• Tie-up with Dairy Units for routing milk payments
• Further extending Electronic Benefit Payments in Andhra
Pradesh, Karnataka, Haryana & Other States
• Extend Cards to Self Help Groups to facilitate them to transact
from their villages
• Facilitating customers to transact using Mobile Phones
21
Branchless Banking – Way Forward
• Obtained licenses for 5 Microsate Branches to cater to
the urban poor – 3 branches have become functional.
• Identify and install at rural markets where people
congregate
• Set up manned kiosks at villages to serve as a linkage
between the branch and the Business Correspondents
after obtaining necessary approvals from the regulator
22
Branchless Banking – Financial Inclusion Plan
Period
Mar.2011
No. of
Branchless
Banking
Units
2500
Number of Number of Number of
households CPSB
CGCC
to be
Accounts Accounts
covered
175000
9,00,000
40,000
Mar.2012
4000
3,50,000
15,50,000
75,000
Mar.2013
6000
5,00,000
25,00,000
1,00,000
23
Awards & Accolades
The Bank has won many awards and the following were for the Financial
Inclusion and Branchless Banking initiatives undertaken by the Bank
• SKOCH Challenger Award “Inclusion Champion of the Year” for the
year 2010 for contributing to inclusive growth of the nation.
• SKOCH Challenger Award - “Inclusion Champion of the Year – 2011”
• Won IBA – Best Bank Award 2010 under “Best Financial Inclusion
Initiative”.
• The ‘Committee on Financial Inclusion’ headed by Dr. C Rangarajan,
the then Chief Economic Advisor to the Prime Minister of India made a
special mention on the ‘Branchless Banking’ initiative of the Bank .
24
Thank you
25
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