July - September 2015

Smart Banking

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Aniruddh Mukherjee Secretary, Department of Finance, Government of Madhya Pradesh

Aniruddh Mukherjee
Secretary, Department of Finance, Government of Madhya Pradesh

With the dream of smart cities likely to come true soon, expectations of citizens are also on a high as they look forward to more intelligent facilities everywhere. Banking being an important domain, various banks are coming up with numerous initiatives to make banking easy, precise and faster. Just to know more about the way bankers intend to make their operations ‘smart’, Elets Technomedia Pvt Ltd organised the Smart Cities Conclave in the City of Lakes recently, wherein smart banking was in focus and experts from the sector shared their insights. We bring you the high points of the deliberations.

Making Aadhaar a payment bridge

With a large number of Jan Dhan accounts being open, the government is trying hard to facilitate citizens. However, there are still a few challenges that need to be overcome.

Keeping the financial inclusion in mind, the government is trying to facilitate citizens through various initiatives like Pradhan Mantri Jan-Dhan Yojana (PMJDY). The Programme is supposed to be the flagship scheme through which all kinds of bank accounts are to be opened and after that supposedly the right beneficiary will get the benefit from it. Further, the Aadhaar integration with PMJDY is important because the Aadhaar biometric cheque or the Aaadhaar authentication has the software that ensures the right person gets the funds.

Authentication via Aadhaar seeding has been a major issue in all kinds of places, even in Delhi. However, enrollment here is over 100 per cent. Besides, there are several states in southern part that have recorded a good number in Aadhaar enrollment. More than 90 per cent people have been covered under Aadhaar there, but again seeding becomes a huge issue there as well.

Initially, Aadhaar was used for two big schemes, including LPG distribution and Public Distribution System (PDS). At present, Delhi is trying to do Aadhaar  based PDS on pilot basis. In a similar manner, the Government in Himachal Pradesh tried to link Mahatama Gandhi National Rural Employment Guarantee Scheme (MNREGS) via Aadhaar payment bridge. Ultimately.

the Government wants to make Jan Dhan accounts operational. The entire payment does not go to the bank accounts, rather it goes through the Aadhaar payment bridge to the bank account, which is linked to the Aadhaar number. Now, the banks have to see when the Aadhaar linking takes place because with that the effectiveness can be managed.

In LPG, a lot of fraudulent accounts have been knocked out and the same is happening in PDS now. Some of the states are trying to implement cash based PDS system in which ration shops will actually not be distributing the subsidised ration, but it will be all cash- based and the person would be able to buy from any shop. Nonetheless, a big challenge for the Government is to operationalise the Jan Dhan accounts in which all the beneficiaries scheme should go like MNREGS, scholarship schemes, PDS and LPG, etc. With the evolution of technology, all the schemes should go via the Aadhaar payment bridge and it may deviate away from Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT).

Transforming banks

 

Anurag Gupta, Senior Manager – Financial Inclusion and Services, AISECT

Anurag Gupta
Senior Manager – Financial Inclusion and Services, AISECT

Financial Inclusion is one of the nine important pillars of Smart Cities. The services are delivered through Business Correspondent model, business facilitator model, NPS, PAN card and KCC, etc., while financial literacy, insurance services, remittance kiosks and mobile banking are its important components. AISECT partnered with the State Bank of India and had started working for Financial Inclusion in 2009. At present, it has 3000 banking kiosks operational in rural, semiurban and urban areas. We are national business correspondents of SBI and Bank of India (BOI). We are also working with Regional Rural Banks (RRBs) like Madhyanchal Gramin Bank and Punjab Gramin Bank. Apart from it, we work with 90 other nationalised banks and operate kiosks. We have our kiosks present in 12 states that facilitate citizens with many services like opening of no frill account, savings account, recurring deposit account, fixed deposit account and remittances, making Immediate Payment Service (IMPS) transactions, Aadhaar enabled payment system, insurance and social security schemes, overdraft facility, small value loan, gold loan, etc. We have opened more than 64 lakh bank accounts through our kiosks and made 3000 crore transactions. Thus, it’s a financially viable model which is also recognised at national level.

Banking kiosks have performed well in PMJDY too. It’s a realtime banking which operates on complete online system. It is basically a small extension counter of a bank, where customers are authenticated by their biometrics. It doesn’t require Smart Card of PoS terminals. Banks provide the technology and we work as BCs, while our outlets are customer service centres. Some essential equipment required in a centre includes computer, printer, web camera, biometric finger print scanner, and connectivity. Business growth can be seen as we had opened a total of 60,000 bank accounts till 2010. However, the figure shot up to more than 29 lakh till 2014-15. We have opened six lakh bank accounts in the current financial year. The transaction value during last year through these kiosks was Rs 1,376 crore. These kiosks have covered the unbanked and farflung areas where banking was not possible and also decongested the rush at urban branches. These kiosks remain operational 365 days and function from 8 am to 8 pm and the cash transaction can take place anytime during this period.

AISECT is a Bhopal based company that deals with training and skill development, professional education, project implementation, eGovernance and other services. We have more than 20,000 centres across India and nearly 6,000 centres are being run at panchayat level. We have our branches in 27 states and three Union Territories, where more than one lakh students get trained on different trades by us.

Making remittance easier

Sanjay Aeron Senior Manager- Sales, My Mobile Payments Limited</center

Sanjay Aeron
Senior Manager- Sales, My
Mobile Payments Limited

My Mobile Payments Limited is into mobile money platform since 2010. We have currently 2.5 lakh merchants across the country and last year, we have transacted revenue of about 1,500 crore. At the moment, we are present in 400 cities and have a consumer base of about 125 million pan-India. The various activi – ties we have been performing include mobile and DTH recharge, bill pay – ments, etc. We have introduced a product called Mobile Money Order, wherein we are transferring small amounts to vari – ous locations by an individual by MTS programme by the government. This programme runs two folds, one is operated through the retail channel and the other through corporate. We are trying to cater the migrated force which has travelled from various areas and they are working in different locations across the country. We would like to help them by remitting money to their family members and near and dear ones to their native place. We are doing this activity at a very small processing fees. We have designed a product wherein somebody transferring money upto Rs 5,000 has to pay a nominal fee of Rs 16 per transaction for processing the case. The activity can be performed in various ways. The first is that the person who would like to transact with us can visit our retail point and complete the activ – ity. Along with the Internet facility, this programme can also run on ordinary mobile handsets, and one doesn’t need to have a smart phone specifically to operate this service. An illiterate person who doesn’t know anything about technology or computer can also avail our services, as we provide SMS index too. Therefore, these are the services trying to help the bottom-most person of our society. One can log on to our website www.mobile-on-money.net and get a code as the page is opened. After that, one needs to log in through his/her mobile number. When the mobile number is captured, the page is opened in which the user requires to fill the details of beneficiary to whom he wants to transfer the money i.e. name, banking details and the amount, etc. Thereafter, an ipin provided to complete the transaction and within 60 seconds of filling the details, the money gets remitted. Further to this, we have recently entered into B2C market. One can download our product MOM – Wallet from Google Play Store. Once registered, the user will get multiple options on the basis of his/her needs. It enables users to shop and transfer funds and much more. There are various other areas we would like to approach, like education, tourism, transport and health because all these sectors can create their own wallet for paperless transaction. This is a smart move in present context.

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