Financial Inclusion through Banking Correspondent

Mahendra Pratap,  Head, Financial Inclsuion, HCL Infosystems

“The rural people need to be the part of the financial system to be able to plan their savings and have access to the formal credit,” says Mahendra Pratap. In conversation with Ankush Kumar

How has HCL started working in the area of Financial Inclusion?

Our experience in Financial Inclusion goes back to 2008 where the problem came from one of the CMD’s of the bank, where the Government has invested Crores of Rupees into the rural sector but it has not shown the results that it was supposed to show. The reason was that the money that was given was used for the purpose of either paying the old tax or some other social activity. Even the banking penetration into the rural areas was very poor as one has to travel few kilometers to find a bank. So there was no encouragement for a rural person to keep a bank account. Therefore the RBI came out with the concept of branchless banking based on the technology. And that’s the time when we thought that what is it required in terms of the security to match the banking services available to the rural masses which is in at par with the urban areas, which means banking anytime anywhere. The rural people need to be the part of the financial system to be able to plan their savings and have access to the formal credit. But today when I look at it so what we did is that we developed a solution which could meet the requirement of banking even at the remotest place. This is based on the wireless technology in the form of GPRS so a remote terminal has the functionality like that of the ATM.

Please tell us about HCL’s financial inclusion model?

HCL engaged and managed business correspondents (BC) deployed in the villages. HCL set up a complete ecosystem for the BCs to ensure that they were properly trained and equipped to facilitate banking and financial services to the local people without the need for them to travel to a distant branch. These BCs who acted on behalf of the Bank also offered services like loans, insurance, pension and other third-party products to the smartcard holders at their doorstep and as per the card holders’ convenience. HCL provided each BC with supporting technology that provided “financial services in a box” – a highly parameterized POS based transaction support for account / transaction upload into main server BC/POS operation management.

What kind of Hardware and software maintenance support was given by HCL?

Some of the services offered by HCL to ensure interoperability among the different systems were customization, installation, operation & maintenance of servers DC and DR services Network. Moreover the administration services included proving network connectivity and interface Web-based online and offline upload facility with multiple connectivity options like Modem / GPRS / CDMA Provided SMS/GPRS Interface Highly scalable database & platform independent synchronisation support between intermediate server with DC server support for POS transactions in online/off-line mode.

Will connectivity still be the major problem in rural areas?

When you talk about the network connectivity there are different approaches to solve this problem. One approach is that we are able to connect this device over multiplicity of networks. What the Government has done is that they have formed Bharat Broadband Limited (BBNL), the objective is to take the fiber connectivity to Panchayat level. Some of the banks are providing VSAT connectivity in addition to what we are doing in this country. The other problem that you will find in the rural area is that you will find connectivity at certain spots. What happens is that the cell density is slow so there are spots where the coverage is not good.

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