ICT SOLUTIONS FOR FINANCIAL INCLUSION – EXPERIENCE SHARING BY STATE BANK OF INDIA

Venue: IDRBT, Hyderabad17th February, 2009

Contents1. TECHNOLOGY INITIATIVES

2. SBI’s INITIATIVES FOR INCREASING AWARENESS OF RURAL MASSES

3. CAPACITY BUILDING OF BUSINESS CORRESPONDENT / BUSINESS FACILITATOR

4. CAPACITY BUILDING OF OTHER STAKE HOLDERS

5. RURAL CREDIT PROCESSING CENTRES – RCPC

6. INITIATIVES IN NORTH EAST, HILLY & OTHER BACKWARD REGIONS

2 STATE BANK OF INDIA

a) Projectb) Scopec) Technology & Process

TECHNOLOGY INITIATIVES : OUTLINE

TECHNOLOGY INITIATIVES

3 STATE BANK OF INDIA

Smart Card & POS PC- KIOSK Mobile phone

OUTREACH

Savings Recurring deposit Remittance SB-OD under finalization

PRODUCTS

Channel management Software introduced Computation of Remunerations to BC/BFs

PERFORMANCE TRACKING

A Little World FINO EKO TCS

TECHNOLOGY PARTNERS

61 districts & 17 states covered Presence in North East, hilly & other backward regions – 21 districts , 9 statesCard base– 18 lakh against target of 40 lakh to be achieved by Mar 31st 2009

CUSTOMER BASE

Despite different technology channels with different front ends, the backend interface, processing, accounting, reconciliation, technical model etc., are only one and linked to CBS. Our approach is across delivery infrastructure presence

PROCESS

4 STATE BANK OF INDIA

Tech vendor BACKEND

POINT OF

SALE DEVICE

SBI’s GATEWAY

WIRELESS - GPRS

SBI CORE BANKING

SBI BRANCHES

SBI BRANCHES

SBI BRANCHES

BC

CUSTOMER

SMART CARD

CASH

DATA

Process : SMART CARD & POS based

Started with ALW Chip less cards introduced Issues: Scalability of technology vendor Engaged FINO as tech vendor and BC. Enrollment started. Testing on with ATOM ; to join as tech vendor and BC

Tech details vary ;

multiple channels

Process : SMART CARD & POS based

5 STATE BANK OF INDIA

ENROLLMENTData entry in laptop/POS. Photo and capture in camera, finger print FP scanner. Account creation – POS Backend & then Core banking. Relaxed KYC.Zero balance No-Frill accounts.

CARDINGCustomer and account data to Card manufacturerKeys by POS backend vendorCard manufacture and distribution

BC ACTIVATIONAgreement & compliance processes. BC’s Account in Core bankingBiometric card to CSP (BC’s agent). POS enabled. Office, cash , forms and Stationary provided.

Customer Operations with smart cardSession start by BC finger print validationOperation by CSP, Customer finger validation for debitsSavings, RD, Remittance available Offline and online operationsBusiness hour and cash holding limit system controlled

6 STATE BANK OF INDIA

KIOSK HOST

SBI’s GATEWAY

SBI COREBANKING

SBI BRANCHES

SBI BRANCHES

SBI BRANCHES

PC INTERNET KIOSK

BC

CUSTOMER

FINGER

CASH

DATA

VALIDATION

Process : PC- KIOSK internet based

Pilot in Ahmedabad & Chennai Circle.Plan to tap the Kiosks under CSC scheme across the country.Finger Print device to be provided by the bank.

internet

Another diversity at all layers

7 STATE BANK OF INDIA

ENROLLMENTData entry/photo in PC/webcam. Finger print capture in FP scanner attached to PC. Account creation – link branch – Core banking. Zero balance No-Frill accounts.Operations after account opening in Core bankingBC AGENTSConfigured in kiosk host. Operational limitsCSP limit administration by BC online over web

CUSTOMER OPERATIONS

Session start by BC finger validation. Operation by CSP. Customer finger validation for debits and balance query. Savings available ; Remittance, term deposits and overdraft to be provided later. Only real-time online operations.Business hour and cash holding limit system controlled

OTHERSAll other features like Smart card channel

Process : PC- KIOSK internet based

Online in future

Offline file

now

TECHNOLOGY INITIATIVES : Process – MOBILE BASED

8 STATE BANK OF INDIA

Application Host- Vendor’s

WIRELESS - USSD

BC’s mobil

e phon

eBC

CUSTOMER

MOBILE PHONE

CASH

Routed Offline to Technology Vendor 3 security checks: Mobile number, Booklet & Security PIN Low cost entry for all

CURRENT STATUS

SBI Core

banking

SBI Gatew

ay

Different people : diversity in tech: front, back and interface to

accommodate

TECHNOLOGY INITIATIVES : Scope

Rural masses, Urban poor & migrant population

61 districts & 17 states covered

Presence in North East, hilly & other backward regions – 21 districts & 9 states

Card base – 18 lakh (target of 40 lakh by Mar 31st 09)

Our approach is to ensure sustainability across the multitude of “diverse, delivery infrastructure” present in the country.

9 STATE BANK OF INDIA

SBI’s INITIATIVES FOR INCREASING AWARENESS OF RURAL MASSES

The Bank has conducted various initiatives to spread both Credit/banking awareness & ICT related product awareness among the masses.Organizing Campaigns at village level to educate rural customers about various financial offerings of SBI.Organizing meetings with village residents at Gram Panchayat level along with Village Sarpanch, wherein the Sarpanch introduces the BC (CSPs) & their products to the villagersCollaborating with the ‘Influential’ people in the villages(teachers, Social workers, NGOs) in educating the rural customers about SBI offerings.Organizing Road Shows, Skits etc. to create awareness about the advantages of Saving money and using it for better utilitiesAnnouncements on two-wheelers and other vehicles about SBI offerings and informing the customers about the site & schedule of enrolment camps in the village

STATE BANK OF INDIA10

CAPACITY BUILDING OF BC/BF Origin: RBI Circular( Jan 06); Framing policies / Operating Guidelines Preparation of Manuals & Dissemination of Guidelines Selection Committee ; Eligible Entities / Individuals Scoring Sheet & Due Diligence Market Reports; Involvement of CMAs Support through CMS/Kiosk host system for unrelated third party CSP administration for Technology vendors. Tracking of Performance through technology enabled softwares- CMS. Registering Code number in CMS & CBS. Sensitivity operating staff on process involving CBS/CMS for performance monitoring & payment of

commission.

STATE BANK OF INDIA11

Training: Programme drawn up & training held at SBLCStationary/Account opening forms/pamphlets & Check list of product/process providedInteraction with Branches/LBOs/RBOs/RCPCs/RACPC/SMECC

1 National BF6 National BCs4000 Regional BCs /BFsOver 10,000 CSPs

Present Status

CAPACITY BUILDING OF BC/BF

STATE BANK OF INDIA12

Risk Mitigati

on

Performance

Monitoring

•BC/BF•CSP•Circle

The Process

STATE BANK OF INDIA13

CAPACITY BUILDING OF OTHER STAKEHOLDERS Operating Staff :

Learning contents developed & e-copies made available on the web/intranet for permanent reference.

Sensitization of all AGMs/Branch staff towards Technology Solutions. Training including technical hands-on on Channel Management Software.

Banks own staff involved in Vendor Software – Escrow Activation & Recovery Testing.

Special training for CM(Rural), OMRs, MRT leaders & CMAs. On the job training provided to the concerned staff.

Vendors: Loan to Technology vendor for procurement of machinery , thus

increasing their capacity. Multiple Vendor Technologies enabled for online transactions with the

bank’s system. Auto reconciliation & MIS support for CSP level reconciliation management through gateway software.

STATE BANK OF INDIA14

RURAL CENTRAL PROCESSING CENTRES – RCPC

Infrastructure & Processing Methodology is in place and being fine tuned

Placement & Training of staff. Monitoring of launch of RCPC.

Foundation for credit data & loan services already laid down

Setting up RCPCs – target Circle wise.Linkage of channels – Branch /BC/BF/MRT.

Workflow/Origination/Processing software being arranged

Framing policy & Operating guidelines. Compilation & distribution of Manuals.

Productivity/TAT norms laid down.Monitoring of performance/TAT/ productivity.Gradual scale up

Processing of all loans in all segments – PER/SME/AGRI.

CURRENT

STATUS126

active RCPCs

Success in implementing the RCPC structure & processes to help

in laying the foundations for the Rural credit

bureau.

INITIATIVES IN NORTH EAST, HILLY & OTHER BACKWARD REGIONS

NORTH -EAST

No. of rural/semi urban branches : 409 No. of ATMs : 151

Rural : 40 Semi urban : 111

No. of RTGS enabled branches : 484 No. of No-Frill Accounts opened : 249575 No. of SHGs linked : 35565 No. of BC Outlets : 79 Business Facilitators (As on 30/09/2008) : 76

15 STATE BANK OF INDIA

Cumulative position at end of the quarter (Dec 08)

SBI TINY Card report for Hilly, North East & Backward regionsState(As on 11.02.2009)

District SBI TINY Card Enrollments

Himachal Pradesh Una 6766Meghalaya West Garo Hills 6,646 Mizoram Aizwal 3,038 Assam Jorhat (Titabar) 13,229

Darang Dist., Assam (Drishtee) 1,832

Uttaranchal Chamoli 4,665 Pauri 4,981 Pithoragarh 10,700

Chhatisgarh Raipur 892 Jharkhand Hazaribaug 8,080

Dhanbad 5,682

STATE BANK OF INDIA16

SBI TINY Card report for Hilly, North East & Backward regionsState(As on 11.02.2009)

District SBI TINY Card Enrollments

Rajasthan Alwar 2,390 Jaipur 2,010 Jodhpur 2,043 Dausa 11

West Bengal Nadia 10544Hugli 196Dakshin Dinajpur 432Murshidabad 187North 24 Parganas 806Nadia Dist. (Shree Sanchari) 2769

STATE BANK OF INDIA17

Total Districts - 21Total SBI Tiny Card Enrollments - 87,899

WAY FORWARD : VISION - MARCH 2012

No. of unbanked villages to be covered : 1 lakh

Customer base to increase by 4 crores

No. of rural branches to go up to 10,000

No. of ATMs in rural areas to go up to 6,000

Focussed shift towards smart cards, mobile banking, internet banking & kiosk banking platforms.

Micro insurance & micro mutual funds to provide a complete basket of services.

18 STATE BANK OF INDIA

THANKYOU

19 STATE BANK OF INDIA