“Innovative use of ICT by PSUs for

Customer’s Benefits”

Project
Financial Inclusion@PNB

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 As per Rangarajan Committee Report
Financial Inclusion is the process of ensuring
access to appropriate financial products and
services needed by vulnerable groups such as
weaker sections and low income groups, at an
affordable cost, in a fair and transparent
manner by mainstream institutional players.

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 Important Milestones on Road to Financial
Inclusion in India
1904 Setting up of Rural Cooperatives
1969 Nationalization of 14 major Commercial Banks

1975 Setting up of Regional Rural Banks

1990s Self Help Group
2005 RBI advised banks to open no frill accounts
2006 RBI allowed BC/BF to act as agents of banks

Sept. 2010 RBI allowed for - profit companies (excluding NBFC) to

act as Business Correspondent

2011 National Payment Corporation of India (NPCI) launched

Interbank Mobile Payment System (IMPS)

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 OUR BELIEF
Banking to the unbanked is a
profitable business
MISSION
“Banking for the Unbanked”

VISION
“ To be a leading Global Bank with
PAN India footprints and become a
household brand in the Indo-Gangetic
plains, providing entire range of
financial products and services under 4
Financial Inclusion Models Adopted by the Bank
Brick & Mortar Model
- Opening PNB MITRA-No frill
accounts (Zero balance accounts)
with relaxed KYC norms
- Launched PNB Mitra ATM card;
withdrawal &
ICT (Information limit : upto Rs. 5,000
Communication
per day.
Technology)
Model
– Base Branch acts as a focal point
for Business Correspondents (BCs)
– BCs are engaged by the
Bank/technology providers
– BC Agents (BCAs) contact the
customers for enrollment and issue
biometric smart cards.
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– BCAs use laptops and POS in Off
 Project FI through RRBs
• Following Srinivasan Committee recommendation, to
leverage technology for business and inclusive growth,
the project CBS@RRB implemented in all the 6 RRBs
sponsored by PNB in April,2010.
• Six RRBs sponsored by PNB:
- Haryana Gramin Bank ,Rajasthan Gramin Bank, Punjab Gramin Bank
- Himachal Gramin Bank, Sarva UP Gramin Bank, Madhya Bihar Gramin
Bank.

No. of Service Outlets 1488

Avg. no. of Txn. In Lacs (Post CBS) per 3.07
day
Customer
• Project Base (In
adjudged asLacs) 87.94 for year
the best IT implementation
2010 by PC QUEST Magazine.
• Project was awarded SKOTCH AWARD for the year 2010.

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FI Products Offered by PNB
• Products offered
– Savings with inbuilt
OD facility upto
Rs.2500/-
• OD facility of Rs. 500/-
is offered upfront
• Proposed new products
– Micro Credit
– Remittances/ Fund
Transfer
– Term Deposit &
Recurring Deposit
– Micro Insurance
Banking transactions
in Financial Inclusion
Cash withdrawal
Cash deposit
Mini statement
Balance inquiry
Besides Mini
Statement facility,
Passbook facility
is also offered to
FI customer.
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Customer Enrollment Process

Web Camera for

Photograph
Biometric scanner for
Fingerprints
Pad for Signature capturing

Battery Power back-up for

undisrupted enrolment

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 FI Vendor
ENROLLMENT PROCESS
Data Back Office
Back Office
conversion 3
n

Validation of FINCBS Server at

Data DC

External
External
Firewall
Firewall
Vendor FI Intermediary
Intermediary server
server

Back Office
1 Back Office
2
Card
personalization
centre

Card
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distribution
Transaction Process
Machine is used to
Transaction at the village carried out by BCA with capture Transactions
Hand Held Terminal (HHT)
HHT application
supports all products

Secured transaction
With BCA card &
Customer card

Transactions are
Recorded in customer
& BCA card

Bank’s security key

embedded in SAM-
smart chip component
of HHT
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Uniqueness of project FI @PNB

•PNB has adopted branchless banking model supported

with smart card based technology.
•It has independent CBS setup for FI server at data centre
with DRS setup.
•The management and control of whole setup is done by
PNB team.
•Data validation, upload and other activities are performed
by exclusive FI back Offices.
•The complete system is secured with symmetric key
based Key Management System( owned and managed by
Bank) as per IDRBT open standards for FI.
•Financial transaction happens at HHT only after
authentication of BC agent’s smartcard and customer’s
smartcard followed by finger print authentication.
•On completion of any transaction, the HHT prompts 11
Uniqueness of project FI @PNB Contd.

•An instant receipt generated from the HHT is given

to the customer
•Data transmission is done in encrypted form.
•Interoperability is achieved through use of
centralized KMS facilitating the FI customers to avail
banking facilities anywhere within the district/state.
•Necessary Information security system and policies
including Firewall system has been put in place for
FI project.
•FI disaster recovery site has been put in place to
meet the challenge of any failure at Data centre.

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BCP in FI (Business Continuity Plan):
•Customer Finger print fails to match
• BCA can manually perform the transaction
( override)
Within the customer wise, day wise limit fixed by Bank
It is controlled through the HHT application
New smart card will be issued if the failures are
continuous

•HHT is lost before the transaction upload

Copy of the transactions are stored in BCA card
Retrieved from the BCA card and uploaded
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•HHT is lost and BCA card is also lost
BCP in FI (Business Continuity Plan) cont.
•BCA fails to turn up
 Alternate BCA sent to village
 Customer card read and the transaction retrieved
 Uploaded to FINCBS after validation
•Customer card lost
 New card is issued with the data already available with the Bank
•Weekly reconciliation between Bank’s account and BC account.
Cash management
• BC maintains main account with bank
- Provides cash to each BCA within the limit
- Cash held with the BCA is insured for loss and fidelity
- BCA to remit the net amount and the data to Bank atleast once in
48 hours
- HHT application will not permit further transaction without sync
with TSP server
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Particulars As on March2011

No Frill accounts opened (lacs) 73.33

Amount in Rs.(lacs) 100342
Out of above
-ICT based accounts ( lacs) 40.89
-Under Brick & Mortar model (Branch 32.44
based) (lacs)
Credit Based FI
•Accounts 18328
•Amount (in lacs) 5380.92
No. FI Back Offices 08
No. of FI SOLs 991
FI Technology Providers 10
Total no. of correspondent (NGOs, sec 25 co. 21
FTC & other bodies)
Business Correspondent Agents 2965
Business Facilitators 1633
Farmers’ Training Centers 9 15
 Major Financial Inclusion Projects
Projects Numb States
er
Projects in Rural 28 Bihar, Rajasthan, HP,
Area Uttarakhand, UP, Punjab,
Jharkhand, MP, Orissa, West
Bengal
Projects in Urban 06 Punjab, Delhi, J&K, Chandigarh,
Area Bihar
NREGA/Social 05 AP, Haryana, UP, Chattisgarh
Security
Total ( ICT 39 14 STATES (Indo Gangetic
projects) Plain) + Andhra Pradesh
Project 01 Rajasthan
‘BHAMASHAH’
Credit Driven 06 UP, Chhatisgarh, North East,
Projects ( Non Bihar , Karnataka 16
Reach under Financial Inclusion
Particulars As on
March
2011
Number of villages with Population > 2013
2000 through Bank Branches (Brick &
Mortar Model)
Number of villages with population > 2186
2000 through BC Model (ICT model)
Number of villages with population < 3219
2000 through BC Model (ICT model)
No. of NO Frill a/cs  opened in 2010-11 10.09 lac
in villages with population over 2000.

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PNB’s Jana Mitra Rickshaw Project

Making Rickshaw Pullers Rickshaw Owners

•Launched in Varanasi on Feb 2, 2008 in association with
Centre for Rural Development
•Extended to Agra, Allahabad, Kanpur, Meerut, Lucknow,
Patna
•Targets to cover 10000 rickshaw pullers
• 9503 Rickshaws are financed under Rickshaw Projects 18
Financing Farmers in Bulandsahar in Collaboration with
Mother Dairy
•ICT Based Financial Inclusion with Credit Driven Project
•Farmers supply milk to Mother Dairy and get fair price
•No dependency on local milk vendors
•Mother Dairy pays back through the accounts (smart card
based) on weekly basis
•BC agent makes payment to the farmers through smart card
•Farmers get loan for milch cattle at affordable interest rate
•More than 30000 farmers have been covered under this
project

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Credit Driven FI Projects in PNB (Data as on June 2011)

• Financing to Farmers in North East through KCC

through BC model.
•5439 accounts are opened (tie up with KAKSSUS
NGO) with outstanding credit of Rs. 26.99 crore
• Financing to Self Help Groups in Rajanandgaon through
BC model.
• Financing to vegetable growers in Tineri & Punpun
(Patna)
•741 accounts are opened with outstanding credit of
Rs. 2.42 Crore
•More than 56000 GCCs issued with outstanding credit of
Rs. 1.16 crore
•More than 16.53 lac KCCs issued with outstanding
credit of Rs. 134.46 crore 20
Capacity Building
Officials of the bank have been trained under the
“Train the Trainer” programme of (Indian Institute of
Banking & Finance) IIBF
A. Training to BC agents
•On-locations training programmes are organized for BC agents
•Bank provides training on its products & processes.
•Technology related training is provided by concerned TSP
B. Financial Literacy Counseling Centre (FLCC)
58 FLCCs have been established for spreading Financial
Literacy
Rural Libraries have been setup for dissemination of Information
in remote rural areas.
C. 9 Farmer Training Centres (FTCs) have been
established under PNB Farmers Welfare Trust to provide
customized training to local farmers.
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D.PNB has established 30 Rural Self Employment
The Way Forward

• With the improvement of connectivity,

online transaction model to be
implemented.
• Web based kiosk/ mobile based model to
be made available at villages
• Introduction of combo card (smart chip
with magnetic stripe) to enable payments
through ATMs.
• Integration with UIDAI project.
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Replicability of the project FI@PNB
• The PNB offline FI model can be
replicated to offer doorstep banking
services in remote rural areas where last
mile connectivity is still a challenge.
• Credit delivery through smart card model
can be implemented to reach a larger
section of the society.
• FI model will help in minimizing the
transaction cost.
• This model can be integrated with RSBY,
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Third Party Assessment/Awards

•E-Governance ‘GOLD Award 2010’ under

award category “Innovative use of ICT by
PSUs for Customer’s Benefits” by
Government of India.

•Special Technology Award for Financial

Inclusion from IDRBT for the years 2008-09
& 2009-10 respectively.

•SKOTCH AWARD for the year 2010.

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Thanks – TEAM IT PNB

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