Transcript FI : RBI GUIDELINES - Sa-Dhan

FI : RBI GUIDELINES
• Introduction of BC/ BF Model
• Use of Information Technology: Smart cards for opening bank accounts with
biometric identification and mobile banking etc.
• Simpler KYC Norms
• No-Frills accounts
• General purpose Credit Cards (GCC)
• SLBC Project of 100% Financial Inclusion. All house-holds
in villages with more than 2000 inhabitants should have bank
accounts by March 2011.
• F.I. Fund / F.I. Technology Fund
(Budget allocation increased by Rs. Cr)
• Financial Literacy - Credit Counseling Centre
 GoI’s Guidelines
• Opening of atleast 250 household accounts by RUSU branches. (Rangarajan
Committee recommendations).
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WHO CAN BECOME
BC OF BANKS?
RBI has permitted the following categories of entities/individuals
as eligible for being engaged as BCs by the banks.
i.
NGOs/MFIs set up under Indian Societies/Trust Acts.
ii.
Societies registered under mutually aided co-op. societies (MACs) Act or
the co-op. Acts. of states.
iii. Section 25 companies.
iv. Post offices.
v. Retired Bank employee
vi. Ex-Service men
vii. Retired Govt. Employees
viii. Individuals as per details in the next slide
RBI
AREA OF OPERATION DISTANCE CRITERIA
RBI’s instructions for distance criteria are:
• The distance between the place of business of the BC and the base (link/branch) should
not exceed 30 kms. in rural/semi urban areas.
• In case the distance is more than 30 kms., in rural/semi-urban areas, the DCC/SLBC
would approve the same.
• In case DCC/SLBC does not give any decision within 3 months, the request will be treated
as approved, and DCC/SLBC notified by the Link Branch accordingly.
TECHNOLOGY INITIATIVES
• Outreach through –
 Smart Card & PoS based combination.
 PC based Kiosk with internet connectivity
 Cell phone based messaging Channel
• Products offered –
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Savings Bank
Recurring Deposit
Remittances
SB-cum – OD
Tiny Card to SHGs as a group
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SBI TINY CARD
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A chip based smart card both contactless and with contact
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Also chipless cards for Govt. payments
Operated with fingerprint identification facility having provision to support 10
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to 12 accounts.
Card based operations are complete in pos (a mobile phone, fingerprint
scanner & printer) supports SB, RD & remittance OD product being introduced
shortly.
Through technology partners viz. M/s A LITTLE WORLD & FINO.
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SBI SHG TINY CARD
Benefits to SHGs
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Get banking services at the place of stay even at odd hours
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No loss of time/earnings and no cost due to travel to branches.
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Avert facing the discomfiture of being turned away by branches.
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Increased savings by depositing even day to day surplus in Bank A/c which otherwise would
get spent.
Benefits to Bank
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De-congest the branches, freeing staff for attending to high value business.
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Invigorated outreach in rural & semi-urban areas
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Improvement in customer service through enhanced level of customer satisfaction.
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Multi products delivery
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Improved MIS on micro customers
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KIOSK BANKING MODEL
•
Provides Internet based, Bio-metrically enabled Banking service to the rural
customers through Business correspondent model.
• Through this alternate channel, customers can do online, real time banking
transaction locally at his place without the Bank’s branch.
• The Kiosk Operator uses his own PC for this operations. Cost effective if
existing infrastructure (with VLEs etc.) is utilised.
FI: KIOSK BANKING cotd.
♦ Administrator
♦ Business Correspondent
♦ A Bank official, who
manage, control and
administer the
application.
♦ An independent entity
who appoints his agents
called kiosk operators or
CSPs
♦ A set of menus are
available through which
he creates, amends,
deletes, controls the BC
and the Kiosk operator.
♦ Menus are provided for
BC’s to create, amend,
delete and effectively
control the Kiosk operators.
♦ Has highest capability
level in the application.
♦ Kiosk operators or CSP
♦ The actual entity
executing the banking
services done as per the
laid down rules and
regulations.
♦ Services including
deposit, withdrawal,
enquiry, statement of
accounts, customers
creation ,id card
generation, report
generation are made
available to the kiosk
operators.
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MOBILE BANKING
• Use low end mobiles with PIN and signature booklet.
•A customer owned cellphone can enable the service in conjunction with a
service delivery agents cellphone.
•No bio metrics.
•Customer gets acknowledgement through sms.
•MOBILE BANKING FI through EKO
• ADVANTAGE: Avoids cost of POS, card, PC-kiosk and fingerprint machine etc. a cheap & simple model for FI.
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RISK MITIGATION MEASURES
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Some measures taken by Banks are:
Obtaining Security Deposit, due diligence process in selection,
committee approach for selection etc.,
Link Branches to oversee the activities of CSPs.
Periodical checks by various visiting Bank officials - dedicated channel
functionaries, controllers and audit team.
Banks to call for Disaster Recovery Plans from BCs and review periodically.
Photograph to be affixed/verified by BC on customer enrolment form.
The photographs will be captured in the system using camera with POS or
web-camera and sent to the server of the tech. vendor/CBS.
Fidelity insurance to be obtained on individual BCs
CASH MANAGEMENT
• The cash management would be the responsibility of the BCs including
arranging transit insurance cover.
• The CSP needs to ensure that at no point of time it is out of cash, and
customers are given uninterrupted service.
• Similarly, adequate balance is maintained in the settlement account of the
BC.
• The premium on transit insurance, however, may be reimbursed by banks
on a case to case basis.
• If requested, overdraft limits are made available to BCs to enable them to
get physical cash for deployment at CSPs.
ENABLERS FOR BCs
• Loans
Loans are being granted to BCs on merits for acquiring
equipments/machines/furniture etc. to set up the CSP like PoS machines,
finger print scanner, computer, mobile, furniture etc under existing
schemes for term loans.
• Training
- Banking operations
The BCs /CSP operators get trained by Banks before
they begin operations.
- Technology equipment handling
Technology vendors also assist for training in operation of
the equipments.
BENIFITS OF BC MODEL
DRIVEN BY TECHNOLOGY
Benefits to customers
Benefits to BCs(BC= BF +)
 Proximity of operations. Travel
time saved.
 Savings habit.
 Safety of funds e.g. women
workers.
 Validity simple – biometric.
 Flexibility in timings.
 Simple process.
 Familiarity with BC – local
 Income generation and viable
business (when BF activity is also
carried out)
 Convenience of business.
 Achieve other goals – Outreach,
presence
 (To launch other business / activities)
 Social goals.
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BENIFITS OF BC MODEL
DRIVEN BY TECHNOLOGY contd.
Benefits to Banks
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Outreach through Alternate Channels
Brick & Mortar Branches - Difficult & Costly
Staff Issues in rural areas.
Need local presence in rural/semi-urban centers
Door to Door approach through CSPs
Cost effective – High cost of delivery through traditional channels.
Business – Bottom of the pyramid.
Reach unbanked villages / areas.
Meet CSR objectives.
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CHALLENGES
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For the Banks
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Shortage of BCs
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Viability of Alternate Channels
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Measuring & Monitoring performance for Alternate Channels
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Branch expansion constraints
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Sensitization of operating staff
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Implementing Risk mitigation measures
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Technology:
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Evolving technologies – need to engage latest tech platforms and processes.
Multiple front end tech but with a common back end process. All accounts
to be in the CBS of Bank eventually
Developing core products catering to specific populace (SHGs)
Added focus on interoperability, scalability and security issues
Integrating with CBS
In house learning and cost.
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CHALLENGES contd.
II.
For the BCs
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Setting up CSPs
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Access to rural areas
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Connectivity problems
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Cash handling (e.g. Govt. Benefit payments)-BCs need support
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Small ticket deposits/loans/transactions yield small commission
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Enrolment Process requires identifying persons correctly, similar names and similar
village.
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CHALLENGES contd.
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Social Challenges
 Inhibitions due to Illiteracy & Lower economic status
 Need for Financial Literacy Campaign
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Regulatory directives
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KYC/AML issues
Outsourcing and bank’s responsibility for their agents
Ensuring inter–operability and open standards
Restricted eligibility criteria permitted by RBI to be BCs
Restrictions on engaging sub agent
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