EBT Model of Post Offices - Challenges & Outcomes in Operating at Scale

Sandhya Rani. K Postmaster General (Busi.Devpt.& Technology) Hyderabad, Andhra Pradesh Enhancing Delivery of Govt. to People Payments in Rural Areas Intnl. Workshop New Delhi, 29.11.12

Plan of Presentation

• • •

Post Office EBT Model in Andhra Pradesh

– Factors leading to the Initiative – Coverage – Implementation Arrangements – Technology solution – Achievements & Outcomes

Lessons & Challenges Policy Implications & Areas for Action

Factors leading to PO-EBT Model



External

 AP Govt. ICT Model for MGNREGS implementation  eFMS fund flow to last payee & ensure real time MIS  Integration w/State Govt. smart card project 

Internal

 Over 13 million Wage Accounts manually handled!!

 To avoid delay in payments  To avoid fraudulent payments  To ensure real time MIS  To address competition from Banks!

PO – EBT Model – Implementation Arrangements

• • • • • Tripartite Agreement in GoAP, DOP and AP Online Online fund flow Post Office Savings Bank Account Local SHG women as Postal Franchisee/CSP in GPs without PO Robust Monitoring & Alerts System

Post Office EBT Model - Coverage

MGNREGS Wage Payments

• • • • • No. of Gram Panchayats: 5125 No. of Districts: 9 (5 underway) No. of Post Offices: 3613 No. of Wage seekers: 4.02 ml.

Wage amts. disbursed: Rs.8588 ml.

• • • •

Social Security Pensions

No. of Districts: 2 No. of Post Offices: 1196 No. of Pensioners: 1.2 ml.

Amount disbursed: Rs.2173 ml.

• • •

Technology:

POTD front end, offline transactions and day end Sync with Server Central Server and application support Real Time MIS on Portal http://appost.aponline.gov.in

1. Generation of Pay Order at MCC 2. Uploading of generated Pay Order to NREGS Server

3.

Authorisation of FTO by CRD 4 . Confirmation of remittance by the Bank 10. Payment of Wages & Upload data

Cycle of Wage Payments

5 . Pushing the Pay Order to AP Online Server (pulled date) 9. Supply of Cash 8. Downloading Deposit data to the POTDs 7 . Crediting wage amounts to individual SB accounts 6 . Approval of Pay Order by the Head Postmaster after receipt of FTO

Electronic Benefit Transfer- Disbursement of MGNREGS Wages

HO 7 3 3 SO 6 APOnline Data Centre 4 3 6 6 5 2 7 BO 1

Muster Roll

NREGS State Data Centre

Day 2 SO Day 1 APOnline Data Centre Day 3/4 BO HO Day 1/2 Entry of Musters & Measurements MGNREGS Central Fund Account Fund Transfer through Bank Day 2 (MCC/DCC) FTO to Bank Fore Transfer Day 2 Day 2/3 Each Day NREGS State Data Centre

Portal appost.aponline.gov.in

District

Delay Analysis

(Peak Month)

(From Pay Order Fetched Date To Paid Date)

Year Month Total No. Transactio ns 1 TO 4 Days % Paid In 5 TO 7 Days 8 TO 14 Days Nizamabad 2010 May 1.27 ml 20.31 18.25

26.95

>14 Days 34.48

Nalgonda 2012 June 1.29 ml 27.69 17.19

NIZAMABAD NALGONDA 23.93

31.18

1 TO 4 DAYS 5 TO 7 DAYS 8 TO 14 DAYS >14 DAYS

Achievements & Outcomes

• • • • • • 100% authenticated payment , no manual payment 100% - Real time MIS Wage disbursement: < 7 days (40 - 45%); 7- 14 days (55 - 60 %) Pension Payment, much appreciated by Pensioners Biometric failures – 0.1% Delay Payments – different reasons – Wage seekers desire to save & not w/d wages immediately – Delay in issue of Wage Slip – Delay Cash supply – POTDs failures – Inadequate monitoring

Lessons & Challenges

• • •

Lessons

– – Tripartite arrangement works better Demonstrated the power of rural postal network – – Transaction without Smart Card – Security of biometrics?

Need to strengthen Cash Supply Systems

Technology related

– Repeat enrolments – absence of interoperable data systems – Integration of Post Office with eFMS – Need for fast tracking R-ICT Project of Dept. of Posts

Operational Issues

– – Dedicated Project Mangers & Capacity Building Limited working hours of Branch Postmaster – Mechanizing & Monitoring Cash Supply Lines

Leveraging the PO Network

Item of work

Existing PO SB MGNREGS wage Payments Govt. Benefit Transfer – Pensions * Indiramma Housing Scheme Untapped!

Coverage

All India All India Kerala, T.N., Karnataka, Rajasthan, H.P. Gujarat, A.P.

Volumes

• • No.of SB Accounts:265 ml.

> Available in > 150,000 POs • No. of Accounts: 58 mil • Amt disbursed: > Rs.300,000 mil • > 97,972 POs • • • • >5.3 mil Pensions MOs/ month Amt paid – 125 crs Commission earned – Rs.70 mil > 1.3 ml SB accounts too • • • No. of SB Accounts: 0.63 mil Amt disbursed: Rs. 9600 mil 14, 683 POs • Direct Cash Transfer • SHGs, W & CD payments, Tribal Welfare, Informal Sector Workers SSS

Policy Implications & Areas for Action

1. Financial Inclusion & other departments related

– POSB as an instrument for Financial Inclusion – Restrictive definition of ‘no frill account’!

– Integration with Aadhar Authentication System – Reengineer CGA business processes relating to PO A/ctg Sy

2. Strategy & Approach – DOP

– Put in place Inter – operable system w/Aadhar link – Strengthen ‘last mile connectivity’.

– Ensure robust real time MIS & monitoring systems – Fast Tracking Rural – ICT Project

Policy Implications & Areas for Action

3. Human Resource & Establishment Review

– – Orientation and capacity building at different levels Strengthening P.O Franchisee/CSP Model: Thinking beyond Branch Office Network – Simple & easily implementable incentive system – Performance based remuneration for GDS BPMs – Simplifying establishment review system of ED BOs

4. Changing POSB Business Processes:

– – Inline with Biometric based authenticated payments Stop duplication of data processing

Policy Implications & Areas for Action

5. Financing Post Offices

– Change conservative authorized cash balances practices – Bring in mandated mechanized cash supply systems – Liberalize norms & simplify process for opening Direct Bank A/cts for large no. of S.Os with local Banks – Strengthen infrastructure in local rural bank branches

6. Accounting & Reconciliation

– Integrating with EFMS/CFMS of State Government partners – Online fund flow to Postmasters’ Accounts – CGA to increase the no. of Accredited Banks for PO transactions in each Circle (allow all Nationalised Banks) – Devise process for Integration into CGA reporting system to enable PAOs pairing and reconciling Online credits

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