Technology has changed the face of banking and it is an accepted fact that information technology is the mainstay enabler for banking in India, says L R Ramchandran, Chief General Manager – Financial Inclusion and Banking Technology, NABARD, in an interview with Rakesh Roy of Elets News Network (ENN) as he also shares about technology trends in terms of the BFSI sector.
Tell us about the role of NABARD’s Financial Inclusion Fund (FIF) and its significance in terms of banking the under-banked segments.
A major segment of the population, inhabiting in geographically interior and underdeveloped regions, isolated on the grounds of gender equality economic, social status etc. are catered through NABARD’s Financial Inclusion Fund (FIF). The deployment of fund support is to meet the need of banking the underbanked segments through awareness, capacity building and several other ways. It also helps in creation of tech-driven infrastructure for delivering the financial services to enable financial inclusion.
How is the information technology (IT) helping the banking and financial sector in India to transform?
Technology has changed the face of banking. The banking technology, in particular, has brought in several changes in the recent years. Now it is an accepted fact that information technology is the mainstay enabler for banking. Core Banking Solution (CBS) has provided the foundation on which these technologies sit and provide functionalities to bank, enhancing their business, outreach and also customer satisfaction. The advent of cloud platform has further opened up new vistas for the banks, in devising and delivering new products. The brick and mortar branches which were earlier the only delivery channel have now become one among the many available channels. Incidentally, the framework for new technologies especially for the rural segment, got impetus through NABARD facilitated CBS project. This enabled these banks to provide RTGS/NEFT, Mobile Banking, Anytime Anywhere Banking etc. to rural customers.
What measures have been taken by NABARD to implement Information Communication and Technology in cooperative banks and regional rural banks (RRBs)?
NABARD has been facilitating technology adoption in the above-mentioned banks (cooperative banks and regional rural banks. It has been an exciting journey with fruitful partnerships. It has provided the framework both at policy-level as well as infrastructure level. It facilitated adoption of card technology, acceptance of its infrastructure (ATM, microATM, POS) or adoption of mobile banking technology including BHIM or AEPS. The institution has been guiding and supporting these banks. It has been responsive to external environment and requirement of banks in designing support mechanism in post demonetisation like supporting Point-of-Sale devices in tier-V and tier-VI and the digital financial literacy awareness programme to the rural population so that they can transact digitally. The long association and understanding of Cooperative and RRBs on one hand and the rural population on the other have provided a unique advantage to NABARD to meaningfully support their needs through our interventions.
Which digital payment innovations are going to be the game-changers for the banking sector in future?
The Bharat Interface for Money (BHIM), Unified Payments Interface (UPI), BankSakhi Dual Authentication and Aadhaar Enabled Payment System (AEPS) are the new models of delivery channel, reducing the service and infrastructure costs that are gaining importance. The transactions and activity on BHIM UPI platform have clocked more than 900 million in volume and close to Rs 1 trillion in value in FY 2017-2018.
The growing importance of these channels and promotion of digital transaction, NABARD has launched a scheme to support RRBs and Cooperative to onboard on the BHIM UPI platform for providing better services to the rural population. The other noteworthy access introduced by us facilitating Self Help Groups (SHGs) to seamlessly operate at BC points with the ‘Dual Authentication’ feature extended to Scheduled Commercial Banks (SCB) and Regional Rural Banks (RRB).
The RuPayKisan Card is going to stay and the related card acceptance infrastructure is being built around it.
Which digital initiatives by NABARD will boost the financial inclusion in India?
The next wave of innovation is expected to come from technologies which provide customer- friendly solutions on the mobile feature phone as most of rural India has such phones and smartphones in keeping with the growing penetration. The focus of scheme would be to address the need of the rural customers in doing digital transactions such as: BHIM-UPI, PFMS, Aadhaar Authentication Agency/KYC verification services, microATM, Dual Authentication, Digital Financial Literacy, Mobile Demo Vans, Central Know Your Customer etc.
In addition, NABARD is also supporting the implementation of the Government of India schemes for boosting of BHIM-UPI and BHIM Aadhaar Pay platform. Apart from this, it is desired to harness the available media space to deliver financial literacy, especially awareness about digital transaction platform to aid financial inclusion and digital transaction in a big way.