EBT Model of Post Offices - Challenges & Outcomes

in Operating at Scale

Sandhya Rani. KPostmaster General (Busi.Devpt.& Technology)Hyderabad, Andhra Pradesh

Enhancing Delivery of Govt. to People Payments in Rural Areas Intnl. WorkshopNew 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

ExternalAP Govt. ICT Model for MGNREGS implementation

eFMS fund flow to last payee & ensure real time MIS Integration w/State Govt. smart card projectInternal

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

5. Pushing the Pay Order to AP

Online Server (pulled date)

6. Approval of Pay Order by the

Head Postmaster after receipt of

FTO

7. Crediting wage amounts

to individual SB accounts

8. Downloading Deposit data to the POTDs

9. Supply of Cash

10. Payment of Wages & Upload data

Cycle of Wage Payments

Electronic Benefit Transfer- Disbursement of MGNREGS Wages

33

55

66

BO

(MCC)NREGS State Data Centre

11

22

MCC

77

33

44

66

77 33

Muster Roll

66

Wage Disbursement – Day Wise Activities

BO

(MCC/DCC)

NREGS State Data Centre

MGNREGSCentral Fund

AccountFTO to Bank

Fore Transfer

Fund Transfer through Bank

Entry of Musters & Measurements

Day 1/2

Day 2

Day 2/3

Day 2

Day 1

Day 2

Day 3/4

Post Office Wage Payments System

Each Day

Portal - appost.aponline.gov.in

District Year Month Total No.

Transactions

% Paid In

1 TO 4 Days

5 TO 7 Days

8 TO 14 Days

>14 Days

Nizamabad 2010 May 1.27 ml 20.31 18.25 26.95 34.48

Nalgonda 2012 June 1.29 ml 27.69 17.19 23.93 31.18

Delay Analysis (Peak Month)(From Pay Order Fetched Date To Paid Date)

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 NetworkItem of work Coverage Volumes

Existing PO SB All India • No.of SB Accounts:265 ml.• > Available in > 150,000 POs

MGNREGS wage Payments

All India • No. of Accounts: 58 mil• Amt disbursed: > Rs.300,000 mil•> 97,972 POs

Govt. Benefit Transfer –

Pensions*

Kerala, T.N., Karnataka, Rajasthan, H.P. Gujarat,

• >5.3 mil Pensions MOs/ month• Amt paid – 125 crs• Commission earned – Rs.70 mil• > 1.3 ml SB accounts too

Indiramma Housing Scheme

A.P. • No. of SB Accounts: 0.63 mil• Amt disbursed: Rs. 9600 mil• 14, 683 POs

Untapped! • 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 Action5. 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

17